In late March, the government of Brazilian President Lula da Silva confirmed media reports that Lula’s predecessor, former President Jair Bolsonaro, had spied on neighboring Paraguay. Specifically, Bolsonaro had ordered the Brazilian intelligence agency to hack into Paraguayan government computer systems to gather confidential information as the two sides renegotiated energy tariffs and electricity pricing from the Itaipu Dam. Paraguay had hoped the new negotiations over the dam—a jointly owned hydroelectric facility on the Parana River that forms the two countries’ border—would provide it with greater revenue now that the debt to finance its construction was fully paid off.
In confirming the reports, Brazil also apologized, stressing that the spying was carried out by the previous administration and that Lula ended it as soon as he learned of it. But the damage had been done.
Paraguayan President Santiago Pena reacted with outrage. He withdrew the country’s ambassador from Brazil, called in the Brazilian ambassador in Ascuncion for talks, accused Brazil of violating international law and suspended the still-ongoing negotiations over the Itaipu Dam while the incident is investigated. In playing to his conservative base, Pena even invoked memories of the 19th-century War of the Triple Alliance, in which Paraguay lost a large portion of its population.