Bolivia’s political landscape has been abruptly shaken after the dramatic arrest of former President Luis Arce on December 11, 2025, in the capital city of La Paz. The move, which comes just over a month after conservative President Rodrigo Paz took office, has ignited fierce debate and underscored the depth of the country’s political divisions following the end of two decades of socialist rule.
Arce, who led Bolivia from 2020 until last month and previously served as economy minister under the charismatic and controversial Evo Morales, now finds himself at the center of a high-stakes corruption probe. According to the Associated Press, law enforcement officials detained Arce as part of an investigation into alleged embezzlement and financial misconduct tied to his years in government. The charges, officials say, stem from his stewardship of the Indigenous Peoples Development Fund—known locally as Fondioc—where he is accused of authorizing the diversion of vast sums intended for social development projects in rural and Indigenous communities.
The government’s case alleges that, during his tenure as economy minister between 2006 and 2019, Arce approved the transfer of at least $52.5 million in hydrocarbon tax revenues earmarked for Indigenous projects into the private accounts of political leaders. Interior Minister Antonio Oviedo, speaking at a press conference, put the figure even higher, accusing Arce and other officials of siphoning off as much as $700 million for so-called “ghost projects” that were never built or left incomplete. “At the time he served as economy minister, Arce Catacora acted as president of this fund, and therefore bore direct responsibility,” Oviedo said, as reported by UPI. He added, “Arce is identified as the main person responsible for this enormous economic damage.”
The investigation into the Fondioc scandal is not new. The fund was shuttered a decade ago amid swirling allegations of misappropriation, but the case had languished until President Paz’s new administration revived it as part of a sweeping anti-corruption drive. Since taking office on November 8, Paz has launched at least ten commissions to scrutinize the actions of past governments, particularly those linked to the long-ruling Movement Toward Socialism (MAS) party founded by Morales. The probe has already ensnared other MAS figures, including former lawmaker Lidia Patty, who was arrested on December 6, 2025, and whose testimony reportedly played a role in the case against Arce.
Vice President Edman Lara made no effort to hide the new government’s intentions. In a video posted to social media, Lara congratulated police for detaining Arce and declared, “Those who have stolen from this country will return every last cent.” He ended his message with a chilling flourish, wishing “death to the corrupt.” Lara further promised that Arce would be the first of many targets, a sentiment echoed by other officials. “The government has decided to fight corruption, and we will arrest all parties responsible for the massive embezzlement of funds,” Oviedo stated, according to Al Jazeera.
Attorney General Roger Mariaca, who issued the warrant for Arce’s arrest, insisted the investigation was not politically motivated, despite the timing and the highly charged rhetoric from government officials. “The case against Arce is not a witch hunt,” Mariaca told local media, according to BBC News. He confirmed that Arce had exercised his right to remain silent during police interrogation and would remain in custody overnight before a judge determines whether he will be held on remand or released pending further proceedings. The charges—breach of duty and uneconomical conduct—carry a maximum sentence of up to six years in prison.
State television reported that Arce was taken to the headquarters of the Force for the Fight Against Crime in La Paz, where staff from the ombudsman’s office were present during questioning. However, the manner of his arrest has come under scrutiny. Maria Nela Prada Tejada, Arce’s former presidency minister, denounced the operation as an “illegal kidnapping,” claiming he was snatched from the street and bundled into a minivan with blacked-out windows. “This is a total abuse of power,” Prada said, maintaining Arce’s innocence and characterizing the charges as baseless.
Supporters of the former president and the MAS party have rallied to his defense, alleging that the new government’s anti-corruption campaign is little more than a political purge targeting leftist rivals. They point to the 90-day travel ban imposed on outgoing officials after the change in government—a measure designed to prevent flight from prosecution, but one critics say is being used to intimidate and detain political opponents. Some MAS lawmakers have gone so far as to call the renewed investigation a “witch hunt.”
Nevertheless, President Paz’s administration insists its actions are guided by a commitment to transparency and the rule of law. In his first week in office, Paz declared he had uncovered “a cesspool” of graft by preceding leftist governments, and prosecutors have since arrested six former executives of the state oil company YPFB on unrelated corruption charges. The anti-corruption push was a central theme of Paz’s campaign and is now being put to the test in highly public fashion.
The broader context for these developments is Bolivia’s recent political transformation. Rodrigo Paz’s victory in the October 2025 runoff election marked a dramatic shift after nearly 20 years of MAS dominance, first under Morales and then Arce. Morales, who became the country’s first Indigenous president in 2006, reshaped Bolivia’s political and social order, empowering Indigenous communities and overseeing a period of rapid economic growth fueled by a natural gas boom. Proven and probable reserves jumped by more than 900% during his tenure, and the country enjoyed an export-driven windfall.
But Morales’ long rule ended in controversy and protest following his disputed 2019 re-election bid, and he is now reportedly on the run for an unrelated alleged offense. Arce, for his part, decided not to seek re-election in 2025 amid growing internal and external pressures. The new government’s promise to investigate past abuses has resonated with some Bolivians eager for change, but it has also deepened the country’s polarization—especially as the corruption probe now targets the highest echelons of the previous administration.
As Arce awaits a court decision on his detention, the outcome of his case is likely to set the tone for Bolivia’s political climate in the months ahead. Will the anti-corruption campaign deliver accountability and restore public trust, or will it further entrench divisions and accusations of political persecution? For now, the country watches closely, caught between hope for reform and fear of retribution.
