Bolivia Ex-President Jailed Over $700M Indigenous Fund Scam

Bolivia ex-president jailed as Luis Arce faces corruption charges over alleged diversion of $700M meant for Indigenous development projects.

Bolivia is witnessing a political and judicial storm as former President Luis Arce Catacora has been placed in pre-trial detention amid allegations of massive corruption. Authorities say Arce mismanaged funds intended for Indigenous development, though he denies any wrongdoing.

Former President Arce Detained Ahead of Trial

On December 12, 2025, a Bolivian judge ordered Arce to remain in San Pedro prison in La Paz for five months while prosecutors investigate claims he embezzled millions of dollars. The arrest came just a month after he stepped down from office, highlighting the dramatic shift in Bolivia’s political landscape.

During a virtual hearing, Judge Elmer Laura rejected appeals from Arce’s legal team for his release, citing the severity of the accusations, which allegedly involve the misappropriation of state funds allocated to vulnerable Indigenous and peasant communities.

Allegations Stem from Arce’s Role as Economy Minister

The corruption case focuses on Arce’s tenure as economy minister under former President Evo Morales between 2006 and 2017. Prosecutors claim he oversaw the diversion of roughly $700 million from a government fund that was intended to finance development projects for Indigenous populations.

Marco Antonio Oviedo, Interior Minister under the new government, described Arce as the main figure responsible for approving transfers of large sums into personal accounts of officials, allegedly for projects that were never completed.

Arce Denies Charges, Cites Political Motivation

Arce maintains his innocence, insisting he had no personal involvement in fund management. He called the accusations politically motivated, stating, “I’m a scapegoat.”

His defense also requested release on health grounds, referencing his previous battle with kidney cancer. However, the judge rejected the request and extended his detention to five months, exceeding the prosecutor’s initial three-month request.

Corruption Probe Revived Under Conservative Government

The investigation originally surfaced in 2015, when the Indigenous development fund was shut down amid corruption allegations. However, inquiries stalled during the nearly two decades of left-wing rule by the Movement Toward Socialism party.

Following the election of conservative President Rodrigo Paz last month, the case was revived. Paz campaigned on an anti-corruption platform, promising accountability at the highest levels as Bolivia faces its worst economic crisis in 40 years.

Vice President Edmand Lara welcomed Arce’s detention on social media, asserting that “everyone who has stolen from this country will return every last cent.” Meanwhile, former ministers from Arce’s administration have denounced the arrest as politically motivated persecution against their party.

Potential Penalties If Convicted

If found guilty, Arce faces up to six years in prison, marking a significant turn in Bolivia’s ongoing fight against corruption and raising questions about the political tensions shaping the nation’s judiciary.