Just a month after stepping down, Bolivia’s former president Luis Arce found himself at the center of a storm on December 10, 2025, when he was arrested in La Paz as part of a sweeping corruption investigation. The dramatic turn of events, unfolding in the leafy Sopocachi neighborhood, has thrown Bolivia’s political scene into fresh turmoil, exposing deep divisions and reigniting debate about the country’s struggle with corruption and political vengeance.
According to The Associated Press, Bolivian law enforcement officials took Arce into custody on charges of breach of duty and financial misconduct. The allegations center on the alleged embezzlement of approximately $700 million from a state-run fund meant to uplift Indigenous people and peasant farmers—communities that had long formed the backbone of the Movement Toward Socialism (MAS), the party of Arce and his predecessor, Evo Morales.
Marco Antonio Oviedo, a senior official in the new administration of President Rodrigo Paz, told reporters, “It is the decision of this government to fight corruption, and we will arrest all those responsible for this massive embezzlement.” Oviedo further stated that Arce had been identified as the main person responsible for the “vast economic damage.” The anti-corruption police unit confirmed to The Associated Press that Arce was being held at their headquarters in La Paz, pending a judicial hearing to determine whether he would remain in detention before trial.
The charges against Arce, which stem from his years as economy minister under Morales (2006-2019) and his role on the board of the Indigenous Peasant Development Fund (Fondioc) from 2006 to 2017, carry a maximum sentence of four to six years in prison. Authorities allege that, during his tenure overseeing the fund, Arce siphoned off state resources for personal use—though, as of yet, no formal accusation directly links him to specific acts of mismanagement. Critics, however, argue that as the top official responsible for state finances, Arce bears at least administrative and political responsibility for oversight failures that allowed resources to be diverted or left without technical backing.
The operation itself was carried out with notable secrecy. As reported by Colombia One, Arce was approached in Sopocachi and whisked away in a police SUV to the Special Force to Fight Crime (FELCC) headquarters. The area was cordoned off, preventing journalists and the public from witnessing the arrest. Maria Nela Prada, Arce’s former Minister of the Presidency and longtime ally, denounced the incident as “a totally illegal kidnapping,” claiming that Arce was not notified of any warrant and was essentially bundled into a vehicle as he walked home from teaching an economics class. In a video posted to social media, Prada declared, “I want to denounce before the Bolivian people and before the international community that just moments ago former president Luis Arce was kidnapped in Sopocachi, a neighborhood in the city of La Paz.”
Prada’s outrage was palpable as she banged on the doors of the police headquarters, demanding information about Arce’s condition and accusing the authorities of political persecution. “This is a total abuse of power,” she insisted, echoing the sentiments of many MAS loyalists who view the arrest as a thinly veiled attempt by the new conservative government to sideline its leftist opponents. The prosecution, for its part, maintains that the case is about “nothing more than tackling graft in Bolivia,” as Attorney General Roger Mariaca Montenegro told local media. Mariaca also confirmed that Arce had exercised his right to remain silent during police questioning.
The backdrop to this high-profile arrest is a nation deeply divided and weary from years of political whiplash. President Rodrigo Paz, who took office in November 2025 after a decisive October election victory, campaigned on a promise to root out corruption and restore economic stability following what he described as “the unmitigated shambles” left by Arce’s administration. Bolivia has been grappling with sky-high inflation, fuel shortages, and depleted state coffers—a crisis that fueled public resentment and paved the way for Paz’s conservative coalition to end two decades of socialist rule.
Vice President Edman Lara, a former police captain who gained fame for denouncing corruption within the force on social media, celebrated Arce’s arrest online. In a blunt message, he promised that “those who have stolen from this country will return every last cent,” closing with the stark warning, “death to the corrupt.” The Paz administration has made clear that Arce’s arrest is just the opening salvo in a broader campaign against alleged corruption by former officials, with Lara vowing that more prosecutions are on the horizon.
The Fondioc scandal itself is not new. Created over a decade ago to finance productive and community projects in rural areas, the fund became notorious for mismanagement and irregularities. Official audits and reports from the Comptroller’s Office uncovered hundreds of unfinished, nonexistent, or barely started projects, despite the fact that funds had been almost entirely disbursed. Investigations revealed fragmented oversight, a lack of technical supervision, and a tangled web of responsibility involving high-level officials and social leaders who benefited politically from the fund’s largesse.
Arce, for his part, has consistently defended his administration, insisting that his role was limited to formal transfer procedures and that operational oversight was the responsibility of other branches of the executive. Still, the renewed focus on Fondioc after the change of government has brought simmering tensions within MAS to the surface. Arce was expelled from the party just two days after leaving office, a move that underscored the internal divisions and the mounting pressure on the former president.
Bolivia’s judiciary, meanwhile, has long been viewed as a political football, with both left- and right-wing governments accused of using the courts to pursue their rivals. When Morales was ousted in 2019 after a disputed re-election, the interim right-wing government issued arrest warrants for Morales and his allies, including Arce, on charges ranging from terrorism to corruption. The tables turned when Arce won the 2020 election, leading to the arrest and sentencing of former interim president Jeanine Añez and other right-wing figures. Now, with the pendulum swinging back to the right, Añez and her allies have been released from prison, and the focus has shifted to prosecuting former socialist officials.
For ordinary Bolivians, the spectacle of yet another former leader in handcuffs is as much a sign of the country’s political volatility as it is of any real progress in fighting corruption. Experts have long noted that Bolivia’s fragile institutions and politicized judiciary create fertile ground for both graft and political retribution, regardless of which party holds power. As the investigation into Arce and the Fondioc scandal unfolds, the nation finds itself once again at a crossroads, grappling with the question of whether justice is finally being served—or whether the cycle of political score-settling simply continues under a new administration.
In the end, the fate of Luis Arce will be decided not only in the courts but in the court of public opinion, as Bolivia watches closely to see if this latest chapter marks a genuine break with the past or just another turn in an endless cycle of accusation and reprisal.
