Political Storm in Paraguay: Banking Scandal and Impeachment Demand Rock Government Praised by Kast

Original article: «Bajando impuestos han crecido»: escándalo bancario y pedido de juicio político sacuden al Paraguay que elogió Kast

The administration of Paraguay‘s president, Santiago Peña, who was recently praised by Kast as «a model for the entire region,» is currently engulfed in a severe crisis sparked by a banking scandal and an impeachment request.

During a visit to the South American nation last July, Kast addressed the National Congress of Paraguay, where he commended the tax cuts as an economic model.

«Paraguay has been a model to evaluate and analyze in recent years, because cutting taxes has led to growth,» the leader claimed at the time.

However, just three months later, the same country that the far-right leader believes has «managed to organize itself» is facing a significant crisis, as a block of 35 opposition deputies filed an impeachment petition in Parliament to remove President Peña and Vice President Pedro Alliana due to a banking crisis that left approximately three million people with frozen deposits.

The Central Bank of Paraguay ordered the intervention and dissolution of Ueno Bank after its solvency ratio fell below the 50% minimum requirement.

Impeachment Accusation Filed Against Santiago Peña

The parliamentary initiative was recorded through a Resolution Project titled «That determines the formulation of an impeachment accusation against the President of the Republic of Paraguay, Santiago Peña Palacios, pursuant to Article 225 of the National Constitution.» Under the same legal basis, lawmakers filed a second document focused on Vice President Alliana.

The text of the document presented against the right-wing leader primarily accuses him of a conflict of interest arising from his involvement with Ueno Holding.

Additionally, the appointment of Carlos Carvallo, former president of Financiera Ueno, to head the Central Bank of Paraguay is claimed by lawmakers to be «incompatible with the duty to safeguard the public interest,” as noted by the House of Representatives in a press release.

The document also accuses Santiago Peña of having promoted changes to the conflict of interest law and of having allowed the concentration of hundreds of billions of guaraníes from the Social Security Institute (IPS) in Ueno Bank, exceeding the limits established by current regulations.

As for Vice President Alliana, he is accused by the legislators of having worked to legislatively shield the financial institution’s crisis and is reproached for «having approved the placement of pension funds and remaining silent in the face of alerts about excessive credit limits with related companies.”

Both documents centralize on the thesis that both the president and vice president of Paraguay were aware of the critical situation at Ueno Bank—which has three million clients in a country with a population of just under seven million—and, despite this, «subordinated the public interest to private interests.»

Under Article 225, the Constitution of Paraguay authorizes impeachment for the president, vice president, and other high-ranking officials for misconduct, crimes committed while in office, or common crimes.

The Chamber of Deputies must formulate the accusation with a two-thirds majority for it to proceed to the Senate, which acts as a tribunal and requires the same percentage of votes for a possible conviction.

Following the presentation, the project will need to follow the regulatory process in the Chamber of Deputies, where it will be determined whether it gains the political support necessary for the impeachment request to advance.