Bolivia’s former president Luis Arce was detained on Wednesday on charges that he “enabled illicit enrichment” by allegedly allowing state funds earmarked for Indigenous communities to be transferred into the personal accounts of government officials.
Arce served as Bolivia’s president until last month, when he handed over the sash to the centre-right former senator Rodrigo Paz Pereira, who won the runoff in an election that ended nearly 20 years of dominance by the leftwing Movement for Socialism, or Movimiento al Socialismo (Mas).
The new interior minister, Marco Antonio Oviedo, said Arce was being investigated as the “principal person responsible” for at least 360m bolivianos (£39.2m) in economic losses involving a fund intended to channel hydrocarbon tax revenues into development projects for Indigenous peoples.
The natural-gas boom was the main driver of astonishing economic growth that lifted thousands out of poverty – particularly many Indigenous and rural communities – during the early years of the administration of the former president Evo Morales, under whom Arce served as finance minister.
The fund, however, was shut down in 2015 after a corruption scandal involving the alleged misappropriation of resources, though the accusations never reached Arce until now.
Investigations were revived after Paz Pereira took office. The president established at least 10 commissions to audit and investigate Mas administrations, one of them focused on the “Indigenous fund”.
Oviedo said on Wednesday that Arce, had failed in his duties while serving as economy minister by authorising the transfer of large sums of money into officials’ personal accounts for “ghost projects” that were never carried out. One such official is the former Mas MP Lidia Patty, who has been in custody since Friday.
Arce “is the principal person responsible for this multimillion economic damage that has occurred in the country,” he told a press conference. “At the time he served as economy minister, Arce Catacora acted as president of this fund, and therefore bore direct responsibility.”
Morales has not been named in the case. The country’s first Indigenous president has been hiding for more than a year in the coca-growing region of Chapare, where hundreds of farmers prevent police or the military from enforcing an arrest warrant against him for allegedly having fathered a child with a 15-year-old girl in 2006.
Paz Pereira has not yet addressed Arce’s arrest directly, but his vice-president, Edmand Lara, posted a video on his social media congratulating the police for apprehending the former president: “We said that Luis Arce would be the first to go to prison, and we are delivering. “Everyone who has stolen from this country will return every last cent and be held to account.”
Lara, a former police officer, became famous on TikTok for making corruption accusations.
According to the attorney general, Róger Mariaca, Arce remained silent during questioning at the headquarters of the Special Force to Fight Crime in La Paz.
Mariaca said he had requested Arce’s detention on the grounds of a a risk he might flee or obstruct the process.
A precautionary hearing is scheduled for Thursday, at which a judge will decide whether Arce should face proceedings in custody or at liberty.
María Nela Prada Tejada, a former minister under Arce, was the first to denounce the former president’s arrest on Wednesday. She said he was innocent and had already presented all relevant evidence in his defence while still serving as a minister.
“This has been a total abuse of power,” she said. “We hope this case is not being taken as an opportunity to carry out political persecution.”
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