In the early hours of July 31, the police under Nicaragua’s co-presidential dictatorship arrested Bayardo Arce, presidential economic advisor to the Sandinista regime and a direct operator for Daniel Ortega. Arce’s home, located in Villa Fontana, Managua, was raided, and his whereabouts are currently unknown, according to police sources and individuals close to Arce who spoke to DIVERGENTES.
Several Special Operations patrols stormed his residence just hours after Nicaragua’s Office of the Attorney General (PGR) accused Arce of conducting “transactions and negotiations” outside the “legal framework in force.” According to the official statement, these operations took place from his private offices and allegedly caused harm to the State’s assets.
“What we don’t know is where they took him, to El Chipote or La Modelo. There was talk of him being summoned for a meeting at the PGR this Thursday, but Rosario [Murillo] is not playing around, especially after Bayardo openly defied her. They sent officers to arrest him in the middle of the night, after releasing a statement,” a source told DIVERGENTES. “We know they’re going to charge and convict him for various economic crimes.”
The arrest of Arce has stirred unrest among members of the old-guard Sandinistas, many of whom are at odds with Vice President Rosario Murillo. DIVERGENTES confirmed that since Monday, Lenin Cerna, the former head of the feared State Security during the 1980s and a key figure in the Sandinista repressive apparatus, has gone into hiding. “He decided to retreat to one of his safe houses. No one has seen him since,” said another source close to Cerna’s inner circle. “Murillo has already sent police to occupy Lenin’s home. They would’ve arrested him too, but he was no longer there.”
In its statement, the PGR said Arce is listed “as the owner of the assets in question,” and that his office carried out negotiations that violated national law. The institution summoned him to respond to a financial inquiry. However, according to the PGR, Arce “simply claimed ownership of the assets and therefore saw no obligation to respond to the Attorney General’s Office or its investigation.”
“Given his refusal, Mr. Bayardo Arce Castaño is hereby summoned once again by this authority to provide the required documentation and to satisfactorily respond to the questions posed by the PGR in fulfillment of its constitutional duty,” reads the statement, which also notes that his answers must be supported by proper documentation.
A high-ranking source within the Ministry of the Interior, speaking to DIVERGENTES on condition of anonymity, explained that the Sandinista regime’s approach to “punishing” Bayardo Arce is meant to avoid upsetting the party’s base and its allied business sectors.
The source said that while purges have been common in the past against opposition figures and dissenting Sandinistas, Arce’s historic importance compels the regime to follow due process, at least on the surface, to avoid perceptions of political vengeance against a former member of the Sandinista National Directorate.
“They’re telling the base: ‘We’re giving him a chance to respond. But if he doesn’t, we’ll have to move forward in other ways,’” the source said, adding that this procedural facade is intended to frame the arrest as inevitable, rather than retaliatory.
Investigation Began with Arce’s Assistant
DIVERGENTES | Archive.
The investigation was reportedly triggered by surveillance of Ricardo Bonilla, Arce’s assistant, who, according to the PGR, was “involved in carrying out those transactions and/or negotiations.” Bonilla was formally summoned by the Attorney General’s Office but refused to comply, leading to his detention in the National Penitentiary System, where he remains under interrogation.
The PGR says it repeatedly summoned Arce to provide documentation and clarify the nature of the assets and transactions under scrutiny. To date, the former advisor has not complied. “He has so far refused to appear as required, disregarding the Constitutional Authority of Nicaragua’s state institutions,” the statement emphasized.
Although the statement does not specify the nature or value of the alleged transactions, it makes clear that they involve “acts that harm the State’s assets.” The PGR warns that “failure to fulfill or respect these Civic Obligations constitutes serious offenses that warrant prosecution.” The statement also underlines that “every citizen is obligated to respect the Constitution and the institutions established to safeguard the rights, duties, and assets of Nicaragua.”
Arce had effectively been under house arrest since the night of Saturday, July 26, according to sources close to the Sandinista commander. The co-presidency stripped him of his presidential security detail and ordered the removal of private guards from his offices in Reparto El Carmen, near the home of Ortega and Murillo.
In 2007, Arce was appointed presidential advisor and reconfirmed in the post on August 16, 2024. He became one of Ortega’s most trusted figures. However, as a representative of the old Sandinista guard, he clashed with Vice President Murillo, who gradually sidelined him to a symbolic role with no real power, allowing him to focus on his extensive private business dealings.
In 2018, amid widespread protests, Arce admitted that imposing a reform on the Nicaraguan Social Security Institute (INSS) without dialogue had been a mistake. He also publicly stated that there should be no political prisoners in Nicaragua. Statements like these, combined with his confrontational yet independent demeanor, ultimately marked his fall from grace.