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Paraguay’s pro-Israel former president taken into custody over banking crisis
Former Paraguayan president Santiago Pena was taken into custody on Saturday after prosecutors charged him over alleged irregular lending and the use of public and pension funds by Ueno Bank. His removal by the Senate followed the collapse of the bank, which left millions unable to access their money and prompted major protests.
The indictment alleges that Ueno Bank received deposits and loans from public and pension entities between 2023 and 2026, and lent irregularly to companies linked to its economic group. Pena, 47, had owned shares in Ueno Holding, the bank’s controlling company, until selling them last year. He was Paraguay’s youngest-ever president and maintained close ties with Israel, reopening Paraguay’s embassy in Jerusalem in 2024.
In short
- Former president Santiago Pena was detained after prosecutors charged him over Ueno Bank.
- The bank collapse left millions cut off from their money.
- Prosecutors allege irregular lending and use of public and pension funds.
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Prosecutors can argue that taking Peña into custody is justified if evidence supports allegations that public and pension funds were exposed to irregular lending through a bank in which he had held an ownership stake. Given the scale of the losses and the public’s inability to access its money, a forceful investigation could help establish accountability and protect confidence in financial institutions.
The case against
Peña’s defenders can argue that an indictment is an allegation, not proof, and that custody or removal from office should rest on clear evidence of his personal involvement rather than his former shareholding or political position. They may also warn that politicised proceedings could undermine due process, particularly if the case does not distinguish his conduct from decisions made by the bank’s managers and public bodies.
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