Arce is in custody as part of a probe into alleged financial misconduct committed while he was economy minister, government says.

Bolivian law enforcement officials have arrested former President Luis Arce as part of a corruption investigation, in a polarising move just a month after the inauguration of conservative President Rodrigo Paz ended 20 years of socialist rule.

A senior official in Paz’s government, Marco Antonio Oviedo, said on Wednesday that Arce had been arrested on charges of breach of duty and financial misconduct related to the alleged embezzlement of public funds during his stint as economy minister in the government of charismatic former leader Evo Morales (2006-2019).

A special police force dedicated to fighting corruption confirmed to The Associated Press news agency that Arce was in custody at the unit’s headquarters in Bolivia’s capital of La Paz.

“It is the decision of this government to fight corruption, and we will arrest all those responsible for this massive embezzlement,” Oviedo said.

While officials described Arce’s arrest as proof of the new government’s commitment to fighting corruption at the highest levels in fulfilment of its flagship campaign promise, Arce’s allies say his arrest is unjustified and smacks of political persecution.

Accusations

Authorities accused Arce and other officials of diverting an estimated $700m from a state-run fund dedicated to supporting the Indigenous people and peasant farmers who formed the backbone of Morales’ Movement Toward Socialism party.

As Bolivia’s first Indigenous president, Morales transformed the country’s power structure and gave Indigenous people more sway than ever.

Serving on the board of directors of the Indigenous Peasant Development Fund from 2006 to 2017, Arce was in charge of allocating funds to social development projects in rural areas.

During that time, officials allege Arce siphoned off some of that money for personal expenses.

“Arce was identified as the main person responsible for this vast economic damage,” said Oviedo.

Bolivia’s attorney general, Roger Mariaca, told local media that Arce had invoked his right to remain silent during police questioning, adding that he would remain in police custody overnight before being brought before a judge to determine whether he will remain in prison pending trial.

The charges against Arce carry a maximum sentence of six years in jail.