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About five hours after the Attorney General’s Office (PGR) released a statement summoning the presidential advisor on Economic Affairs, Bayardo Arce Castaño, to appear in an investigation for “transactions outside the scope of the State,” dozens of police officers from the Special Operations Directorate raided Arce’s house at midnight on Wednesday, July 30, 2025.
Neighbors in the area where Arce’s residence is located, south of Villa Fontana in Managua, told CONFIDENCIAL that they saw a caravan of several trucks carrying police officers arrive and leave, who forcibly carried out the raid.
The neighbors do not know whether Arce was taken to the National Penitentiary System, where his assistant Ricardo Bonilla is being held, or if he was taken to the offices of the PGR, headed by Wendy Morales Urbina.
The threat of the PGR
On Wednesday, July 30, 2025, the PGR reported that it had summoned Arce Castaño twice after learning of “transactions and negotiations” carried out by his offices that “did not comply with the established legal framework” in Nicaragua, and warned him that he could face legal proceedings if he refuses to provide the requested documents.
Sources linked to Arce confirmed that his executive assistant, Ricardo Bonilla—who has worked with Arce in party and government roles for the past 30 years—has been detained since the night of Saturday, July 26, 2025. The PGR admits it summoned Bonilla because “he appeared to be operating those transactions and/or negotiations.”
“Mr. Bonilla refused to comply with the order issued by the highest authority of the State for these purposes and was therefore transferred to the National Penitentiary System, where he continues to be interrogated,” the PGR stated in its press release.
According to the statement, Arce has been summoned twice. On the first occasion, he was instructed about “his duty to respond to the PGR’s asset investigation.” In response, Arce “merely claimed that all of it belonged to him and therefore, he had no obligation to answer to the PGR or its investigations.”
The PGR said that due to his refusal, Arce was summoned again “to present the required documentation and satisfactorily answer the questions posed by the PGR in accordance with its constitutional duties.”
“Mr. Bayardo Arce Castaño has thus far refused to appear as required, disregarding the constitutional authority of Nicaraguan state institutions,” the document reads.
The PGR reminded Arce that “it is every citizen’s duty” to respect the Constitution and the institutions “established to safeguard the rights, duties, and assets of Nicaragua,” warning that “failing to comply with or disrespecting these civic duties constitutes serious crimes that warrant prosecution.”
On the night of Saturday, July 26, 2025, the National Police stripped Arce of his police escort at his home and removed the private security guards from his offices in the El Carmen neighborhood, which were then placed under police control.
The Fall of Arce
Arce, a former member of the Sandinista National Directorate and longtime ally of Daniel Ortega, was appointed presidential advisor in 2007 and reaffirmed in the role on August 16, 2024. However, for years he has acted as an advisor without official government duties, focusing instead on his private business dealings.
Politically, Arce Castaño had been the FSLN party’s point man at the Supreme Court of Justice since 1997—back when the FSLN was still in opposition—until he was removed from that role by Rosario Murillo in October 2023 and replaced by Fidel Moreno, the FSLN’s secretary of organization.
Sources close to Arce say that Ajax Delgado, Arce’s business partner, and Supreme Court Justice Gerardo Arce, the presidential advisor’s brother, were also summoned and appeared before the PGR. After the interrogation, Delgado and Arce were released.
Arce could become the third former member of the Sandinista National Directorate to be placed under a de facto house arrest regime by the “co-presidents” Daniel Ortega and Rosario Murillo—joining former revolutionary commander Henry Ruiz Hernández (“Modesto”).
Another former member, Humberto Ortega Saavedra—ex-Army Chief and Daniel Ortega’s brother—died on September 30, 2024, as a “political prisoner,” after being placed under house arrest and isolated for publicly questioning the dynastic succession of Daniel Ortega in favor of Rosario Murillo.
Still Officially an Advisor, But Sidelined
Arce served as a Sandinista National Liberation Front (FSLN) lawmaker in the National Assembly for ten consecutive years (1997–2007).
That changed in early January 2007 when Ortega returned to power and appointed Arce as his economic advisor. Arce then played a key role coordinating the economic cabinet and maintaining relations between the Ortega government and big business leaders.
However, he began to be sidelined from the start of Daniel Ortega’s third consecutive presidential term (2017–2021), during a period of uncertainty over his role and rising prominence of Murillo, who by then was already vice president. Despite this, the former member of the historic FSLN leadership remained in the position of presidential adviser on Economic and Financial Affairs, a role he still holds formally.
From this post, Arce not only helped maintain ties between the public and private sectors but also frequently defended Ortega’s government, especially against international criticism—such as when the United States sanctioned Roberto Rivas, then-president of the Supreme Electoral Council, for “significant corruption,” among other accusations.
“What acts of corruption and human rights violations are they accusing Roberto Rivas of?” Arce challenged when questioned by journalists, asserting that the U.S. imposed sanctions simply because “they think they own the world.”
He Also Criticized Ortega
On April 26, 2018—just eight days after the start of the popular protests—Arce admitted that pushing through a Social Security reform without consensus from the business sector had been a mistake. Still, he justified it by saying it was urgent to approve the reform to prevent imminent “illiquidity” that would soon make pension payments impossible.
“I wouldn’t say there was repression—there was just a situation with the police, like what happens in social unrest when at some point, you lose control,” he told Univisión in an interview.
With his casual style, which he often used to confront journalists critical of the government he served, Arce also criticized the government in closed-door meetings with its supporters. For example, in May 2019, during an assembly of Judicial Branch workers from León and Chinandega held at the Ruiz Ayestas Auditorium of UNAN-León, Arce stated that Nicaragua should not have political prisoners, and that political prisoner Eddy Montes should never have been killed in La Modelo prison by a guard.
Sanctioned by the European Union, the presidential advisor was also included in an investigation carried out by the Central Investigative Court No. 5 of Spain’s National Court to determine whether Nicaragua’s honorary consul in Las Palmas de Gran Canaria, José Herrero de Egaña, had charged commissions of between 3% and 5% to companies for developing projects in the country, allegedly with Arce’s complicity, according to reports from the newspaper El Español.
