ASUNCIÓN, Paraguay — The government of Paraguay on Thursday effectively ordered the U.S. ambassador to leave the South American nation, escalating tensions between the allies in the wake of the Biden administration’s sanctions on a tobacco company linked to the country’s powerful former president.
In a dramatic statement that took diplomats aback, the Paraguayan 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.
Ostfield’s expedited departure, the ministry said, would “avoid the loss of confidence in a person damaging the relationship that we have historically maintained.”
The request appeared to be in protest against the White House’s latest move to tighten its sanctions against Horacio Cartes, one of Paraguay’s wealthiest people who served as president from 2013-18, owns dozens of lucrative businesses and retains considerable influence over the country’s ruling Colorado party. The U.S. government first sanctioned the cigarette tycoon last year, accusing him of “significant corruption.”
On Tuesday, the U.S. Treasury Department announced sanctions on Tabacalera del Este, a large tobacco producer that the U.S. government accused of illegally funneling millions of dollars to Cartes, its former majority shareholder. The company, also known as Tabesa, has angrily rejected the accusations and referred to the sanctions as an “abuse of power” by the U.S. government. Cartes has denied all allegations of corruption and said he no longer owns nor is directly involved in Tabesa’s operations.
The U.S. Embassy in Paraguay confirmed that the Foreign Ministry had summoned Ambassador Ostfield for a meeting Thursday, saying only that they “had a good discussion and talked about the sanction announcement as well as other topics.” Summoning a foreign ambassador for explanations is tyipcally intended to express protest on the part of a host country.
The U.S. Embassy did not comment on Paraguay’s demand that Ostfield leave on an accelerated timeline.
It was immediately clear when the ambassador would leave. Ostfield’s successor has been named but the Senate has not started the confirmation process, which could take anywhere from a few months to a few years.
In a news conference, Paraguayan Foreign Minister Rubén Ramírez Lezcano said the government objected “to the media coverage and politicization of the administration’s sanctions.”
“The direct or indirect intervention of any state in the internal affairs of Paraguay compromises our independence and sovereignty,” he said.
His remarks seemingly referred to a news conference called by Ambassador Ostfield earlier this week in which he stressed his commitment to anti-corruption reforms in Paraguay, saying that 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 language in diplomacy, the mention of extradition nonetheless raised alarms and stirred frantic debate in Paraguay, where Cartes’ loyalists have a majority in both houses of Congress. In a show of support and defiance — and a display of Cartes’ enduring influence — dozens of lawmakers from the conservative Colorado party showed up to Cartes’ mansion in the capital of Asunción on Tuesday after the sanctions announcement.
Notably absent from the photo that surfaced showing a crowd of smiling politicians surrounding Cartes on his pool deck was President Santiago Peña, a key ally and political protégé of Cartes.
Pressure was building on Peña to defend the former president, observers say, even as credit agencies warn that concerns about corruption continue to weaken investor confidence in one of Latin America’s fastest-growing economies.