A fierce, nail-biting contest is being waged between Brazil and Argentina, and this time it’s not what FIFA calls “the essence of football rivalry.” Nestled betwixt the two South American giants is landlocked Paraguay, straddling the tropic of Capricorn, flanked by mighty rivers and lush forests on all sides, and split by a namesake river into a fertile south that feeds the rest and a poorer north wrestled from Bolivia in the 1930s. A 34-year-old democracy of 7.4 million, 96% Christian, and ruled by the 135-year-old conservative Partido Colorado for 66 of the past 70 years (including through the 35-year iron-fisted rule of strongman Alfredo Stroessner), the small statelet is on a collision course with Western liberalism. On one side of the struggle stands Colorado, the Paraguayan Church, and what few right-wing allies the country has been able to enlist; the enemy is a motley front made up of Joe Biden’s progressive diplomacy, the EU, the sprawling NGO-industrial complex they together bankroll, and even the Inter-American Commission on Human Rights (IACHRs). There’s a reason you’ve not heard of the Paraguayan battleground in the global culture wars. America’s GDP is 200 times larger, with Paraguay’s per capita income world-ranked between Kosovo and Fiji. Besides, the country is yet to pay a significant price for bucking the left-globalist tide on gender, such as being booted from Mercosur, the region’s common market. In the grand scheme of things, Paraguay seems not to matter.
For a time, my own knowledge of Paraguay was limited to its star performance at the 2010 World Cup, its loss of territory and 90% of its male adults in an 1860s war with its neighbors (the region’s deadliest ever), and its German supremacist colonies founded in the 1880s. That was only until I met a delegation of the incoming Colorado government of 45-year-old President-elect Santiago Peña, to take office in August. The occasion was in nearby Buenos Aires at a right-wing summit where I spoke for a think-tank from Hungary—another bogeyman of the NGO-globalist complex—and had the opportunity to chat with Rodrigo Gamarra, a Colorado MP, and Salma Agüero, rumored to be the next Youth Minister in Peña’s cabinet. We couldn’t help but notice the eerie similarities in the globalist onslaught against Budapest and Asunción. Both capitals are the object of a parallel infowar depicting us as retrograde and protofascist. Foreign aid—and even multilateral funds lawfully owed to us—destined for both countries are being conditioned on implementing some version of the gender agenda. And last, a similar ideological vendetta is being waged under the pretext of fighting corruption and upholding rule of law. This may seem a war for Colorado’s conservative voters alone to fight, but Paraguay is in fact a laboratory of a broader, global experiment, and the war’s outcome matters far beyond its borders.
As across the region, one of the war’s belligerents—Washington—has been ensnared in Paraguay for a while. Alfredo Stroessner was an asset in Operation Condor, the U.S.-led campaign to solidify right-wing rule across the Southern Cone by means of intel ops, state-sponsored murders of left-wing leaders, and even CIA-backed coups. A caudillo who ruled stably, he amended the constitution seven times to re-elect himself. He mixed military authoritarianism with a form of free-market economics nuanced by smart protectionism. Stroessner elevated Colorado to hegemony, with the party later inheriting his fusion of social conservatism and (properly understood) economic liberalism. But Stroessner outlived his utility as an anti-communist bulwark when the Berlin wall fell, and George H. Bush’s diplomats began looking for a way out. They found it in 1989 in Andrés Pedotti, Stroessner’s closest confidante of 35 years who had curried favor with Colorado’s softer faction. Pedotti, though immensely wealthy thanks to Stroessner’s patronage, led a coup against him, backed by Washington and the Vatican. He went on to abolish the death penalty, martial law, legalize the opposition, and exile his former boss to Brazil. Washington’s backing exposed the sheer mendacity of U.S. foreign policy in Paraguay, a mendacity that keeps resurfacing decades later: Pedotti had orchestrated some of the regime’s gravest human rights abuses and had amassed most of his wealth from narco-trafficking.
The advent of democracy made not a dent on Colorado’s popularity. The party went another 19-year spell unbeaten, securing Paraguay’s place in a deepening regional market, keeping at bay the 1998-2015 regional tide of left-populist politics, and—yes—deploying a clientelist network that siphoned off a share of growth’s dividends in bribes and other shady practices. In 2012, former priest Fernando Lugo broke Colorado’s 61-year run at government by running on an anti-corruption platform that mostly elided social issues, where the party still outpolled him. Lugo soon became the elusive holy grail of Hillary Clinton’s diplomacy: a non-Bolivarian alternative to the reactionary right, with U.S.-backed NGOs soon lobbying for comprehensive sex education (CSE) in Paraguayan primary schools. Lugo ultimately backed down under pressure from the Church he had served, though Paraguay’s sexual dysfunctions remained an international progressive gripe. As of today, two Paraguayan girls aged 14 or less get pregnant everyday (the share of abuse is unknown), with 20, 000 pregnancies of girls aged 10-19, 80% of them in family settings (by far the region’s largest rate). Lugo was ultimately ousted in 2012 by a parliamentary coup, which a U.S. embassy cable ascribed to two Colorado bigwigs, admittedly to muddle the party in a constitutionally dubious move (Dilma Rousseff even called, unsuccessfully, for Mercosur to oust Paraguay until Lugo was reinstated).
Colorado, meanwhile, stayed resolutely on the nay side of the gender wave, except for a brief flirtation with same-sex marriage in January this year, which Peña soon retracted. Horacio Cartes, the businessman the party drafted to run in Lugo’s wake, once jokingly referred to gays as “monkeys” on the campaign trail, and even suggested he would shoot himself in the genitalia if one of his sons came out of the closet. Beyond rhetoric, successive party leaders from Cartes to Peña have wagered that the fix for unwanted teen pregnancies—a blight they say is best eradicated by raising incomes—is simply not putting sexual education in the state’s hands (which Colorado mandarins control anyway, thus shutting the door to LGBT groups even if the law changed). They instead propound in-family awareness and a firm hand against sexual abusers. The year before Cartes’ mandate ran out, his education minister banned CSE from primary schools, a move rebuked even by the Inter-American Commission on Human Rights (IACHR) . Enrique Riera even goaded the NGOs that if he were to find one CSE-filled textbook, he would burn it himself in a public square. Nonetheless , except for a few educational materials put in circulation by Lugo’s government, Riera’s bill had little effect, probably because it failed to define “gender ideology.” The debate has since remained similarly static: LG BT groups demand an unpopular legislative change that would go unenforced by Colorado-loyal teachers, whilst the party fires up its base by raising the strawman of indoctrination.
After a four-year friendship with the Trump administration, Colorado bigwigs knew that by the late 2010s the next U.S. President could bring ‘woke’ America’s weight to bear in Paraguay’s gender wars. This came to a head under Mario Abdo Benítez, who beat Peña to become Cartes’ successor in 2018. The shift happened, though on unexpected terms. In March 2022, Anthony Blinken made clear where the U.S. stood through a tool also deployed in Hungary and Poland: appointing a gay satrap, Marc Ostfield, whose ties to Paraguay’s LGBT groups were deliberately aimed to inconvenience Colorado, if not the party’s voters. But the Biden administration’s war against the party took on a larger dimension in July, when the State Department designated Cartes, then serving as Colorado’s president, as “significantly corrupt,” a tool enabled by an appropriations bill as part of Biden’s global fight against kleptocracy. In January this year, Blinken upped the ante by deploying the Magnitsky Act against Cartes, banning 24 entities he owns from doing business in the U.S. or accessing U.S. banks, and placing 4 of them on the Office of Foreign Assets Control’s (OFAC) Specially Designated Nationals (SDN) list. In March, Blinken invoked the same grounds to ban Carter, Hugo Velázquez (by then Peña’s VP and Cartes’ forerunner as party leader), and a slate of other Colorado grandees from entering the U.S. The sanctions worked: Velázquez suspended his presidential candidacy and Cartes resigned as his conglomerate’s CEO.
This diplomatic offensive may seem a justifiably grounded and legally air-tight move wholly separate from Biden’s policy qualms with Colorado. Yet upon closer inspection, whether justified or not, the offensive’s timing wasn’t coincidental—it was election interference. If Biden’s team was so hell-bent on rooting out corruption from world finance and Paraguay was such a clear culprit, why the two-year wait to roll out the designation, the sanctions, and the ban? The likely reason is that they (wrongly) thought they had an easier partner in Benítez, hoping he could be finessed to deliver on corruption and gender. Although Benítez was less compromised in the Cartes imperium than Peña, the rapprochement clearly didn’t happen, and is even unlikelier under Peña, a mentee of Cartes, who came out of the shadows to back his campaign. As if by coincidence, Blinken rolled out the Magnitsky sanctions mere days after Peña won the primary, in a thinly veiled jab at him going into the general race. Despite these measures , Peña won in April against a fractious opposition with 42% of votes, less than Benítez in 2018 but with a larger lead vis-à-vis his main rival, Efraín Alegre (28%), not least thanks to the vote-splitting eruption of populist candidate Payo Cubas (24%). Peña vaguely committed to rooting out corruption—as had Benítez before him—but more crucially, he held fast against gender ideology. Now Biden is stuck with a guy he can’t work with, and tensions are unlikely to abate.
But the larger question is whether the offensive is really about what is claimed on paper. Cartes’ corruption is real but overblown. In the late 1980s, he was jailed twice on charges of currency fraud and cleared both times by court. He has since likely laundered money on and off through offshore accounts, but the exact revenue sources are unknown, and most certainly not in the same league as the region’s most wanted culprits. His alleged money laundering network stretches no further than Brazil, whose extradition request under Dilma Roussef is most likely politically tainted. Then comes the graver accusation of enmeshment in narco-trafficking. In 2000, a plane full of pot landed on Cartes’ ranch in what he claimed was an emergency stop unbeknownst to him. The hardest drug he can be credibly accused of trafficking is tobacco, and even then, his involvement with cigarette smuggling happened only tangentially through his conglomerate’s cig manufacturer. The more serious allegation is that illegal tobacco clears routes for harder drugs, but then again, Cartes is a petty bandit in a drug-infested region . His involvement with harder stuff has never been proven, and Blinken’s moves have supplied no new proof. Paraguay is a large pot producer but only a transit country for cocaine, with too few consumers to have a meaningful domestic market. If you’re looking for the bad guys, they’re elsewhere in the region. And some, unlike Cartes, are evading sanctions.
A telltale sign that Paraguay is at worst a peripheral battleground in the drug wars came out in May last year, when the country’s leading anti-narcotics prosecutor, Marcelo Pecci, was murdered in far-off Colombia. Even more off-base is the accusation that Cartes is in bed with terrorists. The only serious allegation, still unproven, is that he may have brokered a deal with Hezbollah and Brazil’s Primeiro Comando da Capital (PCC). If true, this would be no doubt an ill-thought move, but Cartes remains in the good graces of Hezbollah’s main enemy, Israel, and even moved Paraguay’s embassy to Jerusalem in his first year in office, a move Benítez reversed but Peña is poised to reinstate (Peña has also pledged to recognize Taiwan). Hezbollah may use illegal tobacco to finance its operations in the region but concrete evidence of its presence in Paraguay is yet to emerge. That evidence, meanwhile, constantly fills the news cycles of countries further north, governed by far more venal and corrupt left-Bolivarian proto-authoritarians, such as Perú, Bolivia, Colombia, Brazil, and of course, the troika of tyranny—Venezuela, Cuba, and Nicaragua. Some of these leaders have been sanctioned, others less so, and some are going about their wrongdoing scot-free, but even in cases where sanctions parallel those on Cartes, Washington’s asymmetry equates the well-documented malfeasance of far-left leaders with the still uncertain misconduct of Cartes. Double standards much?
There could be another rationale for the assault. Though nominally targeting Cartes’ shenanigans, it could in reality aim to make an example of Paraguay for its corruption. Transparency International ranks the country 137th out of 180 (not the region’s lowest). By the opposition’s estimates, about 80% of the state apparatus is loyal to Colorado, which means civil servants skew conservative out of adherence to the party’s principles—wide prosperity and social conservatism—much like the mandarinate in many a rich country, not least America, skews left for symmetrical reasons. Allegations of endemic corruption are also exaggerated. Vote-harvesting happens at hardly a greater scale than in the U.S. Despite Cubas’ claims of fraud, the April race was rubber-stamped as free and fair by OAS and EU observers. What corruption exists takes place in the upper echelons of every party: in Colorado, it takes the form of influence-peddling around Cartes, with many younger cadres owing him their careers. But then again, Cartes is on the way out, and Peña, though his mentee, is best placed to begin ushering Paraguay into the era of virtuous politics in line with developed economies. The country’s youngest-ever president and a man who stands on his achievements alone (a graduate of Columbia, the central bank, the IMF, and a former Finance czar), in his many post-election media ops Peña has shied from carrying water for Cartes, claiming his troubles are his alone.
And even on their face, the punches at Paraguay’s corruption are likely to backfire by souring relations not between governments, but between D.C. and the Paraguayan people. Ambassador Ostfield, in a statement dispelling claims that the designations amounted to interference, claimed that instead they “reaffirm the anti-corruption commitment of the US, which stands with Paraguayans in support of rule of law.” Through their vote, Paraguayans passed on this support. On International Anti-Corruption Day, Ostfield claimed the practice is “a drag that bogs down Paraguay.” Yet he never gauged, or even attempted to estimate, how much it saps the country’s prospects, if at all. The reason is that the answer is: very little. Paraguay is a powerhouse for Foreign Direct Investments (FDIs) relative to its economy, and the Getulio Vargas Foundation—named after a Brazilian autocrat who was no friend of Paraguay—has ranked it as the region’s most business-friendly climate, something unsettling to the usual corruption-saps-growth narrative. This is the social contract that Colorado has solidified, which Biden wants to undermine: despite systemic but tolerable (and dropping) levels of corruption that correlate with low development, the economy under Colorado has grown on average at 5% annually over the past decade. Now Biden is hell-bent on undermining that model in a petty crusade against one man’s nefarious but negligible shady practices.
One could still give Biden’s team the benefit of the doubt and assume their crusade to be only tangentially about defeating Colorado’s conservatism. On one hand, the country has enshrined traditional marriage in its 1992 constitution, refused to include gender orientation as grounds for illegal discrimination, and banned abortion except when the mother’s life is threatened. These policies are all hardly amendable. They reflect the deeply ingrained preferences of Paraguayan voters. They’re consistently decried by the NGO-industrial complex (from Amnesty International to the local #NoDiscriminesParaguay) and, increasingly, by Biden’s rainbow diplomacy. But couldn’t corruption be genuinely the bigger enemy? Whether the former is the premeditated antechamber to the latter or not, purging Paraguay of its decadent, greedy leaders may be viewed in Foggy Bottom as more urgent than bending these retrograde policies, important though the latter may eventually become. Then what is the Justice Department waiting for to help Paraguay’s prosecutors get the job done through capacity-building efforts often deployed in nearby countries? (In March, the country’s attorney general, Emiliano Fernández, responded to the designations, sanctions, and bans by launching his own probe at Cartes and Velázquez—a move thus far unresponded to up north). Why is D.C. not issuing extradition requests to be enforced the next time Colorado is shown the boot?
The hypothetical strains credulity. Clearly, the evidence of ingrained kleptocracy in Paraguay may have cleared the State Department’s relatively low burden of proof (Foggy Bottom has released annual reports that increasingly spotlight the alleged vulnerability of Paraguayan sexual minorities as potential human rights violations). But the evidence has manifestly not proved enough to trigger a whole-of-government effort to destabilize Benítez’s outgoing government, or Peña’s incoming one (as it admittedly had in the case of Hungary in the lead-up to Viktor Orbán’s re-election last year or may turn out to be the case in Poland, where the government faces another testy campaign this summer). In Washington, there’s a clear consequence to this asymmetrical channeling of evidence into forming foreign policy. In the age when our diplomacy is increasingly abandoning the pursuit of America’s narrow interests in favor of ideological wars against foreign governments, the diplomatic deep state sees an opportunity to impress its preferences and prejudices upon foreign policy tools heretofore reserved for run-of-the-mill economic statecraft. Such was the case with the State Department’s battery of policies. Cartes and Velázquez were the scapegoat, the self-righteous fight against kleptocracy the smokescreen, and Paraguay’s mores and traditions the real enemy. In a twist of fate, Paraguayans can’t be blamed for viewing social change as another channel of American imperialism.
