Bolivia’s corruption probe: Understanding the case against Luis Arce
Former Bolivian president Luis Arce was arrested in La Paz on December 10th, as part of the long-running investigation into the Indigenous Fund scandal (Fondo de Desarrollo para los Pueblos Indígenas, Fondioc), one of the country’s most significant corruption cases of the last two decades.
Prosecutors accuse Arce of breach of duties and economic misconduct, arguing that irregularities occurred under his supervision when he served as minister of economy and finance during Evo Morales’s government between 2006 and 2017.
The Fondioc was created to finance development projects in Indigenous and rural communities, but investigations found that many of those projects were left unfinished, never began, or did not exist at all. The Bolivian Attorney General’s Office claims that millions of bolivianos were diverted, mismanaged or transferred improperly. According to the official indictment, one of the key elements used to request Arce’s arrest is a 2009 board meeting act, which places him among the authorities responsible for approving the release of funds later identified as irregular.
Prosecutors argue that Arce had a legal obligation to oversee and verify the proper use of Fondioc resources, and that he failed to intervene despite evidence of mismanagement. The case file states that “the former president knew of irregularities in the conduct attributed to him”, pointing to authorisations issued while he formed part of the economic team that managed the fund. This is the basis for the charges of “incumplimiento de deberes” (breach of duty) and “conducta antieconómica” (economic misconduct).
Arce, who left office in November after completing his presidential term, has so far exercised his right to remain silent. The Public Prosecutor’s Office has requested three months of preventive detention, citing risks of obstruction and flight. His former chief of staff, María Nela Prada, denounced the arrest as a “kidnapping”, while government officials insist it is part of a renewed national effort to pursue corruption cases without exception.
The Fondioc investigation has been active for years and has implicated multiple former officials, including ex-legislators and public servants. With the recent change of government and President Rodrigo Paz’s pledge to strengthen anti-corruption enforcement, the case has returned to the centre of Bolivia’s political landscape, and Luis Arce has become its highest-profile detainee to date.
This story is written and edited by the Global South World team, you can contact us here.
