Former leader denies charges over alleged diversion of funds meant for Indigenous development projects
Published On 13 Dec 2025
A Bolivian judge has ordered former President Luis Arce to remain in detention for five months while prosecutors investigate allegations he embezzled millions of dollars from a fund meant for Indigenous communities.
Arce, who left office just a month ago, appeared before Judge Elmer Laura in a virtual hearing on Friday, two days after his arrest on the streets of La Paz.
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The judge rejected appeals from Arce’s legal team for his release and ruled he must await trial in one of the capital’s largest prisons, citing the seriousness of charges that “directly affect state assets and resources allocated to vulnerable sectors”.
No trial date has been set.
The accusations centre on Arce’s time as economy minister under former President Evo Morales between 2006 and 2017, when authorities say he oversaw the diversion of approximately $700m from a state fund created to channel natural gas revenues into development projects for Indigenous peoples and peasant farmers.
Interior minister of the new right-wing government, Marco Antonio Oviedo, has described the 62-year-old former president as “the principal person responsible” for approving transfers of large sums into personal accounts of government officials for projects that were never completed.
Arce maintained his innocence during Friday’s hearing, saying he had no personal involvement in managing the fund and dismissing the case as politically motivated. “I’m a scapegoat,” he told the judge. “The accusations are politically motivated.”
His defence lawyers had requested his release on health grounds, noting his previous battle with kidney cancer.
However, Judge Laura denied the appeal and exceeded the prosecution’s request of three months’ detention by ordering five months in a state prison rather than a juvenile facility.
The case first emerged almost a decade ago in 2015 when the Indigenous fund was shut down amid corruption allegations, but investigations stalled during the years of Movement Toward Socialism governance.
The probe was revived after conservative President Rodrigo Paz took office last month, ending nearly two decades of left-wing rule in Bolivia.
Paz campaigned on promises to root out corruption at the highest levels as Bolivia grapples with its worst economic crisis in 40 years. His vice president, Edmand Lara, celebrated Arce’s arrest on social media, declaring that “everyone who has stolen from this country will return every last cent”.
Former ministers in Arce’s administration have condemned the arrest as an abuse of power and political persecution against the Movement Toward Socialism party.
If convicted, Arce faces up to six years in prison.
