President Fernando Lugo signed a $30 million agreement last month with the U.S. ambassador to bolster Paraguay’s judiciary, public administration and national police force and reduce endemic corruption and patronage.

A former Roman Catholic bishop, Lugo has been in office just nine months, elected on promises that he would end systemic graft and redistribute wealth in a nation where 20 percent of the population earns 62 percent of the nation’s total income while the poorest 60 percent earns less than 20 percent, according to U.N. statistics.

Litany of scandal

Undoubtedly, the president was grateful for the opportunity to focus on issues other than several scandals swirling around him.

Just days before Easter holiday, a 26-year-old former parishioner named Viviana Carrillo claimed Lugo had fathered her 2-year-old son and that their affair began while he was still a bishop. The disclosure caused the country’s newspapers and bloggers to talk of little else. A local song even mocked a campaign slogan, replacing “Lugo has heart” with “Lugo has heart, but he didn’t use a condom.”

After several days of silence, the 57-year-old Lugo addressed the scandal head on. In a news conference he admitted to being the boy’s father and promised to accept full responsibility.

“I have failed the church, the country, the people, and all those who believed in me,” Lugo said, asking the nation for forgiveness.

A week later, a poor 25-year-old soap-seller named Benigna Lequizamon claimed Lugo fathered her 6-year-old son, Lucas Fernando, who she said was named after Lugo. Several days later, a third woman named Damiana Hortensia Moran, a 39-year-old former Lugo campaign worker, surfaced with a similar claim. While Lugo has denied Lequizamon’s claim, offering to submit to DNA testing, he has remained silent about Moran’s assertion that they have a 17-month-old son.

Calls for his resignation
The new revelations sparked even members of his own political coalition to call for his resignation. “Your current personal situation has made you lose all credibility,” said Sen. Alfredo Jaeggli in a public letter.
Lugo, however, has pledged to finish his term, which ends in 2013, and recently reshuffled his Cabinet in what he described as a relaunch of his government.
To be sure, there were serious doubts about whether Lugo could effectively govern the country even before the scandals hit.
The former priest has no political power base, having won last year’s election as the head of a coalition of parties called the Patriotic Alliance for Change, which includes about a dozen small leftist groups. Most political analysts agree that it will be difficult to keep these factions together while pushing a reformist agenda through Congress.
“We’re going to have to get used to the idea that the transition will be built on crises,” political analyst Milda Rivarola recently told the Asuncion daily, La Nacion.
After six decades of dictatorship and corrupt one-party rule by the Colorado Party, many Paraguayans were hopeful that Lugo would become the “Obama of Paraguay.” He had vowed to bring morality and ethnics to one of the world’s most corrupt political systems. In 2008, Paraguay rated 139 out of 180 countries in the annual Berlin-based Transparency International Corruption Perceptions index.
‘He promised change’
“He was elected president because he promised change,” said Aldo Zuccolillo, the 80-year-old publisher of the nation’s most prominent newspaper, ABC Color, and a strong Lugo supporter. “The Paraguayan people were fed up with a political party that robbed the country for 60 years.”
As president, Lugo has promised to address the problem of hundreds of thousands of poor farmers, who were pushed off their lands by large landowners connected to the Colorado Party, many of whom are Brazilians in the northern, soy-rich region of the country. Paraguay has the most unequal distribution of land in the region. Most farms are small, and rural residents live in extreme poverty. Only 1 in 100 farms is large, yet the large farms, when combined, claim 79 percent of Paraguay’s agricultural land.
Lugo has also vowed to fight drug trafficking and smuggling of contraband goods. U.S. officials estimate that 50 percent of Paraguay’s economy is in the “informal” sector.
Before the paternity claims, Lugo’s strongest asset had been charisma, popularity among the poor, and a squeaky clean image. The key question now, most analysts say, is whether his personal magnetism will be enough to lead the country into badly needed reforms.
“It is hard to see how Lugo can now credibly and effectively fight against abuses and corruption in Paraguay since he himself has been so tarnished,” said Michael Shifter, vice president for policy at the Inter-American dialogue, a Washington think tank. “The prospects for serious change were not too bright even before these revelations appeared.”
Fernando Lugo
Paraguay President Fernando Lugo is a product of the poor rural class that he hopes to raise up.
He was born May 30, 1951, in a small village in the San Pedro del Parana district. His uncle and several brothers were involved in politics but ran afoul of the dictatorship of then-President Alfredo Stroessner, who ruled with an iron hand between 1954 and 1989. Like many political opponents, they were forced into exile.
Lugo worked as a schoolteacher before becoming a novitiate of the Divine Word Missionaries in 1970. He later spent five years as a Catholic missionary in Ecuador where he came under the influence of the Liberation Theology movement that stressed defending the poor and working for social change.

When Lugo returned to Paraguay in 1982, his sermons about the rights of landless peasants living in extreme poverty came to the attention of Stroessner’s security forces. At the suggestion of his superiors, he traveled to Rome to study social sciences. In 1987, he returned to Paraguay, two years before Stroessner was ousted in a military coup.

In 1994, he became bishop of the San Pedro Diocese, which he gave up in 2005 to run for public office.

By 2006, Lugo became a well-known leader of peasant land movements, and a strong opponent of Stroessner’s Colorado Party that had ruled Paraguay for 61 years.

Some 100,000 supporters signed a petition asking him to run for president, and by the time he was elected last August – the Vatican finally granted him lay status a month before the election – he had forged a coalition of small parties that helped end more than six decades of one-party rule.

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