Luis Argaña served in a number of important national positions during previous administrations before running an ultimately unsuccessful bid for president in the country's 1998 election, losing in a bitterly contested primary election against Paraguayan General Lino Oviedo. Due to the General's involvement in a failed coup attempt in 1996, Oviedo was imprisoned before the 1998 general election. Oviedo's running mate, Raúl Cubas, became the de facto candidate for the Colorado Party, but lacked the widespread support that Oviedo commanded. Luis Argaña was selected as Cubas' running mate, the pair subsequently being elected to office by a wide margin.
There was widespread belief that Cubas, a relatively weak political leader, was merely a puppet for the disgraced General Oviedo, and one of Cubas' first actions as president was to grant Oviedo a pardon from prison, defying the Paraguayan Supreme Court. Shortly thereafter, the legislative branch began an investigation that would ultimately lead to impeachment proceedings against President Cubas.
With Cubas' impeachement pending, Argaña was set to succeed him as president. However, assailants ambushed the vice president's vehicle just outside of his Asunción home on the morning of March 23, 1999, peppering the SUV with multiple rounds of gunfire before escaping. President Cubas ordered a lockdown of the country's borders. In the wake of the killing, the subsequent riots that took place in the capital area, and his impending impeachment, Cubas resigned the presidency on March_28, fleeing the country and seeking and ultimately being granted political asylum in neighboring Brazil.
Argaña's assassination is yet to be clarified, but popular theory holds that the ousted General Oviedo (who had been granted asylum in Argentina shortly after his release from prison) masterminded the crime. Although Cubas was generally viewed to be easily manipulated by Oviedo's influence, his impeachment would mean Argaña would ascend to power, whereas Argaña was one of Oviedo's staunchest political rivals. The belief that Argaña was assassinated to prevent an Oviedo opponent from running the country was strengthened when the Paraguayan Congress sought to extradite the general from Argentina, without success.
As a candidate, Argaña has been criticised for bringing Stroessner's era officials back to political life, through his faction Colorado Reconciliation Movement.