In his first two years in office, Paraguayan President Santiago Peña Palacios has lived lavishly. He has logged more than sixty-four official international trips, often flying first class, projecting the image of a confident, globally engaged head of state. At home, however, many Paraguayan citizens and foreign investors describe a starkly different reality—one marked by fourth-class treatment in the courts, systemic judicial abuse, and a legal environment increasingly hostile to private capital.

Peña has been eager to present Paraguay’s legal and economic landscape as that of a resurgent giant, a country finally shedding its reputation for institutional fragility. Yet critics argue that beneath this optimistic narrative lies something far darker: the routine violation of private initiative, the erosion of property rights, and the normalization of corruption within the judiciary itself. Far from an isolated problem, this corrosion appears to be structural, sustained by judges and prosecutors whose misconduct is rarely punished.

Without first guaranteeing internal peace, the defense of private property, or the protection of wages and profits earned by working Paraguayans, the head of state has devoted significant rhetorical energy to foreign causes, including calls for peace in the Middle East. Detractors note that he appears more engaged in international moral posturing than in the day-to-day work of restoring trust and stability from within the walls of the López Palace.

Roughly a year ago, that disconnect was laid bare by an investigative campaign led by journalist Carlos Benítez of El Observador, which exposed what has since been described as a promissory note mafia. According to the reporting, the scheme was orchestrated by the prominent lawyer Marciano Daniel Lobo and challenged by a small group of senators who have retained a reputation for ethical independence, including Rafael Augusto Filizzola Serra, founder of the Progressive Democratic Party, and Lilian Graciela Samaniego González of the governing Colorado Party.

Filizzola has emerged as a central figure in defending citizens ensnared by what he has characterized as a Sicilian-style white-collar mafia. Together with Senator Samaniego, he has attempted to deploy every available institutional tool to bring criminal accomplices—many allegedly occupying senior positions within Paraguay’s court system—before justice. The task is formidable, requiring not only political courage but sustained leadership and genuine patriotism.

The alleged network extends well beyond the misuse of credit instruments. At its core, critics argue, lies a sophisticated criminal structure involving judges and senior judicial officials themselves. Some estimates claim that nearly 80 percent of Paraguay’s judiciary may be implicated in acts of malfeasance, many of which go unpunished due to the inaction—or outright complicity—of the Attorney General’s Office.

This constellation of power is commonly referred to as the cabal: an organized criminal network composed of high-ranking political figures and judicial authorities, bound together by mutual protection and impunity. In a dramatic escalation, lawyers associated with Marciano Daniel Lobo have petitioned for the impeachment of all members of the Supreme Court of Justice of Paraguay. The request alleges systemic nepotism, the appointment of relatives and associates, and the operation of shadow law firms staffed by family members of sitting justices.

Those cited include María Carolina Llanes, whose son Álvaro Rojas is alleged to be linked to such practices; César Diesel, president of the Supreme Court, whose brother-in-law, lawyer Miguel Marín, has repeatedly surfaced in controversial land disputes; and Blas Pereira, who reportedly operates under the political protection of Vice President Pedro Alliana. Additional names are expected to emerge as investigations continue.

The Spanish legal scholar Manuel Ossorio y Gallardo once wrote, “Those opportunists who twist the law to satisfy their greed are not true lawyers.” The sentiment resonates in Paraguay today, where dispossession has become a recurring feature of the legal landscape. One illustrative case is that of Dionisia Maiz, from the Agropil region along the Pilcomayo River, whose defense has been taken up by the well-known attorney Federico Campos López Moreira, a longtime advocate for those stripped of land through dubious legal maneuvers.

Alongside the promissory note scheme, a parallel “mafia of precautionary measures” is said to operate within the judiciary. In one case, an agricultural company reported being dispossessed of more than 18,000 hectares of land through a procedural maneuver that effectively legalized the seizure. The complaint was formally submitted to the president of the Supreme Court. No action followed.

That silence has fueled suspicions of involvement by César Diesel himself, as well as by Miguel Marín, who critics say frequently intervenes through intermediaries. Paraguayan media have also reported on a widely publicized police operation relying on allegedly fraudulent resolutions issued by Judge Josefina Gunsett of Canindeyú.

The most consequential ruling, however, came from Judge Guillermo Trovato, whose wife serves as a rapporteur for a Supreme Court justice. In a decision that stunned legal observers, Trovato facilitated the dispossession of an agricultural enterprise valued at approximately $300 million, a maneuver widely criticized as legally audacious and institutionally corrosive.

Property invasion and land usurpation have plagued Paraguay for years, but recent cases suggest the phenomenon is accelerating. The matter of Nivaldo Ouriquez, accused of seizing land through forged titles and fraudulent injunctions, illustrates how such practices can persist for a decade with neither judicial nor governmental intervention, inflicting lasting damage on owners and the broader economy.

Despite official efforts to market Paraguay as a regional investment haven, business leaders describe an environment of profound legal insecurity. They point to a recurring tactic: manufacturing legal crises to depress a company’s market value, then pressuring owners into selling assets at a fraction of their worth. Firms such as Americana Agropecuaria S.A., Agrofort S.A., and Estancia Ibel have publicly denounced these practices.

The controversy has also reached Paraguay’s security institutions. According to local reporting, arrest warrants against Derlis López, an indigenous employee of Estancia Americana, were allegedly shelved for more than five years. Only recently were they revived, raising questions about selective enforcement. López had previously confronted lawyer Javier Báez Galeano during an assault on the estate. Báez Galeano was later revealed to have been a business partner of Mauricio Schuartzman, a convicted drug trafficker.

The timing is striking. As these revelations surfaced domestically, President Peña was addressing elites at the World Governments Summit in Dubai, portraying Paraguay as a stable, Nordic-style democracy. The contrast was sharp, particularly alongside the appearance of Ecuadorian President Daniel Noboa, who spoke candidly about confronting drug trafficking and state capture. Paraguay, though landlocked, remains a major cocaine transit hub, yet its armed forces are widely regarded as underfunded, technologically obsolete, and compromised by corruption.

On February 5, El Observador reported that the jury in the impeachment of judges had noted press reports about Judge Trovato’s conduct. The judge had annulled a precautionary measure protecting a soybean harvest at Estancia Americana, a decision that effectively enabled the appropriation of more than $5 million from its owner.

As Paraguay approaches presidential elections in 2028, the country faces a stark choice: persist with entrenched corruption, adopt a cosmetic reform model that preserves impunity, or attempt a radical purge of the system. Senator Lilian Samaniego is widely viewed as the establishment figure with the strongest ethical standing, while independent and radical candidates—including Paraguayo Cubas—offer more disruptive alternatives. Others would represent continuity, and with it, mediocrity.

Paraguay now stands at a crossroads. Whether it confronts its judicial crisis or continues to deny it will determine not only the fate of its democracy, but its credibility in the world beyond its borders.