How the Indigenous Fund was created; how it operated and how it became one of the biggest cases of corruption in the state

The Development Fund for Indigenous Peoples and Rural Communities, better known as the Indigenous Fund, was created in 2005 as a historic achievement. However, it ended up becoming one of the biggest corruption scandals of the era of the Movement Toward Socialism (MAS) in power, with confirmed damages in the millions and thousands of projects left unfinished. The Indigenous Fund was created on December 22, 2005, through Supreme Decree 28571, during the administration of Eduardo Rodríguez Veltzé. Its creation was a direct response to a mobilization of the Guaraní people, who demanded a share of the benefits of the Direct Tax on Hydrocarbons (IDH). Researcher Manuel Morales, author of Fondo Indígena: la gran estafa (The Indigenous Fund: The Great Scam), explains that, after a confrontation with the military in Santa Cruz, the Guaraní demanded 10% of the IDH. The government conceded by granting 5%, but extended to all rural and indigenous regions of the country, turning the Fund into a national redistribution mechanism. The Fund was designed with a multisectoral board dominated by the executive branch and the main rural and indigenous organizations. This design sought social participation, but over time it became a closed circuit where the same organizations that promoted projects were the ones that approved and oversaw them. Although created in 2005, the Indigenous Fund did not actually begin operating until 2009, with the arrival of its first director, Elvira Parra, who remained in office until 2011. The following individuals then held the position: It was during these administrations—and especially at the beginning of Aramayo's tenure—that irregularities attributed to the decisions of the board of directors through its representatives of social organizations began to be detected. In 2015, Nemesia Achacollo, in her capacity as Minister of Rural Development, reported to the Senate that between 2006 and 2014 the Fund received: The amount of money was enormous and the control mechanisms weak, according to reports from the Comptroller's Office, which also showed that: The case affected organizational structures related to the MAS. Among those investigated or prosecuted were: The list is extensive. The investigations involved more than 2,000 people linked to the execution of projects: leaders, technicians, consultants, and ministerial delegates. In 2015, the Comptroller's Office confirmed initial economic damages of Bs 71 million. The government intervened in the Fund and opened criminal investigations. The director at the time, Marco Aramayo, became the main defendant, although he claimed to have been used as a “scapegoat” and pointed the finger at Evo Morales' leaders and ministers. Aramayo faced more than 200 lawsuits before his death in 2022. The new interim director of the Indigenous Development Fund, Sergio Alan Barba, joined the proceedings against Lidia Patty, the former MAS deputy who is already in preventive detention for this case. This expanded the charges against Arce. The lawsuit alleges at least five crimes against Luis Arce, for which he will be charged and placed under precautionary measures in the coming hours. Arce is being investigated in his capacity as Minister of Economy, according to the lawsuit.