Paraguay's new president Pedro Alliana replaces cabinet as Peña probe deepens

Alliana reshuffles the cabinet

Pedro Alliana was sworn in on Friday, 6 November, after the Senate removed Santiago Peña from office. Alliana has since asked for the resignation of all ministers appointed by his predecessor, saying he wants stronger coordination and more efficient management. On Monday, 9 November, he named Eduardo Ariel González as legal adviser to the Presidency, a post local media say goes to a trusted ally of former president Horacio Cartes. Juan Pablo Cosp, a vice minister, is to head the Ministry of Information and Communication Technologies in place of Gustavo Villate, and Víctor Andrés González will lead the Ministry of Environment and Sustainable Development.

Alliana also proposed economist Fernando Rivarola for the Central Bank board. Rivarola was the former supervision manager who warned about Ueno Bank's operations months before its collapse, and he was removed from that post under Peña's government while Alliana was vice president. His appointment needs Congress approval, and the Senate planned an extraordinary session on Monday to consider it, along with Jorge Luis Schreiner Marengo as Central Bank president.

Ueno Bank depositors

The Central Bank intervened in Ueno Bank on 3 November over solvency problems, leaving about three million customers, including pensioners, without normal access to their money. Since Thursday, 5 November, about 1.2 million people have recovered a total of $168 million, according to Central Bank data. Advances of up to $20,000 began on Monday for depositors holding more than that amount and for customers with debts, from which overdue installments are deducted. The guarantee fund will not cover refunds above $36,000 per account, which leaves open what will happen to public money held at the bank, including pension contributions. El Confidencial reports that the bank also held state funds from public institutions and social security, and protesters have been filling city streets.

Raids and a sealed vault

Prosecutors searched Peña's Asunción residence on Monday for almost five hours, seizing documents, phones, CCTV recordings, tablets and computers. They also searched a Ueno Bank office and the home of former Central Bank president Carlos Carvallo. Prosecutors are tracing assets abroad, asking Luxembourg to freeze crypto assets and seeking cooperation from Argentina, while the US Justice Department has offered help. Prosecutor Elena Fiore told reporters:

This procedure was quite important, and we believe it is positive given the amount of documentation we found.

The search of Peña's summer house in San Bernardino, outside Asunción, began on Sunday afternoon. Investigators found a hidden door and entered a panic room, where a second steel vault with digital codes, physical keys and fingerprint and iris readers stopped them. Sources say its Israeli-made system requires the iris of Peña or a close relative. Prosecutor Silvia González said:

Unfortunately, we could not finish the work because we found the security vault, which is of high complexity.

Prosecutors sealed the house after repeated failed attempts. For now they have ruled out forcing Peña or his wife, Leticia Ocampos, to open it, and a controlled explosive detonation is risky because the room lies beneath a large pool. One resident who spoke anonymously said anything valuable had likely been removed after several tinted-window vehicles came and went on Friday and Saturday.

Peña's case and US contact

Peña had filed a resignation shortly before the vote, but the Senate went ahead with impeachment and removed him with 44 of 45 votes, the remaining senator being absent. Prosecutors have accused him of breach of trust and attempted fraud, and he faces suspicions of illicit enrichment and conflict of interest. He is in pretrial detention, though reports differ on whether he is held in a military regiment or under house arrest. Marco Rubio congratulated Alliana by phone on Sunday, 8 November, according to spokesman Tommy Pigott, who said Washington aims to reaffirm its commitment to a solid and lasting partnership with the Paraguayan people. The Trump administration had close links with Peña's government, which signed a status of forces agreement with the United States in March.