Asuncion, Paraguay — Paraguay’s government on Thursday ordered the U.S. ambassador to leave the South American country, raising tensions between the allies after the Biden administration imposed sanctions on a tobacco company with ties to the country’s powerful former president.
In a dramatic statement that stunned diplomats, Paraguay’s Foreign Ministry asked the U.S. government to “accelerate the departure process” of Ambassador Marc Ostfield, a career diplomat appointed by President Joe Biden in June 2021.
According to the department, Ostfield’s expedited departure would “prevent the loss of trust in one person from damaging the relationship we have historically maintained.”
The request appeared to be a protest against the White House’s latest move to tighten sanctions against Horacio Cartes, one of Paraguay’s richest men who served as president from 2013 to 2018, owns dozens of lucrative businesses and still wields considerable influence over the country’s ruling Colorado Party. The U.S. government was the first to sanction the cigarette magnate last year, accusing him of “significant corruption.”
On Tuesday is the US Treasury Department Announces Sanctions on Tabacalera del Este, a major tobacco producer accused by the U.S. government of illegally funneling millions of dollars to Cartes, its former majority shareholder. The company, also known as Tabesa, has angrily rejected the accusations, describing the sanctions as an “abuse of power” by the U.S. government. Cartesa has denied all allegations of corruption and said it no longer owns or is directly involved in Tabesa’s operations.
The U.S. Embassy in Paraguay confirmed that the State Department had summoned Ambassador Ostfield for a meeting on Thursday, saying only that they “had a good conversation and discussed the announcement of the sanctions and other topics.” Summoning a foreign ambassador for clarification is usually intended to express protest on the part of a host country.
The embassy did not comment on Paraguay’s demand that Ostfield leave sooner. Ambassador Ostfield had planned to remain in his post until the end of Biden’s term in January 2025. His successor has been named, but the Senate has not yet begun the confirmation process, which could take anywhere from months to years.
During a press conference, Paraguayan Foreign Minister Rubén Ramírez Lezcano said the government objects “to the media attention and the politicization of the government’s sanctions.”
“The direct or indirect interference of any state in the internal affairs of Paraguay endangers our independence and sovereignty,” he said.
His comments were an apparent reference to a press conference called by Ambassador Ostfield earlier this week, in which he emphasized his commitment to anti-corruption reforms in Paraguay and said the Biden administration was prepared to “use the range of relevant tools to combat corruption, including visa restrictions, designations, financial sanctions, and extradition.”
Although standard diplomatic language, the mention of extradition nevertheless raised alarm and sparked heated debate in Paraguay, where Cartes’ loyalists hold majorities in both houses of Congress. In a show of support and defiance — and a demonstration of Cartes’ enduring influence — dozens of lawmakers from the conservative Colorado Party descended on Cartes’ mansion in the capital, Asunción, on Tuesday after the sanctions were announced.
Conspicuously absent from the photo that emerged showing a group of smiling politicians around Cartes was President Santiago Peña, a key ally and political protégé from Cartes.
Pressure on Peña to defend the former president has been mounting, observers said, even as credit agencies warn that concerns about corruption continue to undermine investor confidence in one of Latin America’s fastest-growing economies.