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On the night of Saturday, July 26, 2025, the National Police stripped Bayardo Arce Castaño, Presidential Adviser on Economic Affairs, of his police security detail at his home and evicted the private security guards from his offices located in the El Carmen neighborhood. The offices are now under police custody.
Arce, a former member of the Sandinista National Liberation Front (FSLN) National Directorate and an ally of Daniel Ortega, was appointed presidential adviser in 2007 and reaffirmed in the position on August 16, 2024. However, for several years, he had been a government adviser in name only, focusing instead on his private business dealings.
In the political sphere, Arce Castaño had been the FSLN’s party representative in the Supreme Court of Justice since 1997, when the FSLN was still in opposition. He remained in that position until October 2023, when Rosario Murillo ordered his removal and replaced him with Fidel Moreno, the FSLN’s organizational secretary.
Sources close to Arce confirmed that his executive assistant, Ricardo Bonilla—who worked with him in both party and government roles—was questioned over the weekend by both the Police and the Office of the Attorney General.
Arce is now the third former member of the FSLN National Directorate to be subjected to a de facto house arrest imposed by the “co-presidents” Daniel Ortega and Rosario Murillo, following similar measures taken against former revolutionary commander Henry Ruiz Hernández (“Modesto”).
Another former member of the FSLN National Directorate, Humberto Ortega Saavedra—ex-army chief and Daniel Ortega’s brother—died on September 30, 2024, as a “political prisoner.” He had been detained and held in isolation at his home after questioning the dynastic succession of power from Daniel Ortega to Rosario Murillo.
Arce Held His Title, But Was Sidelined and Functionless
Arce served as a National Assembly deputy for the Sandinista National Liberation Front (FSLN) for ten consecutive years, from 1997 to 2007.
That changed in early January 2007, when Ortega took office as president of Nicaragua and appointed Arce as his economic adviser. The role granted Arce significant influence over the economic cabinet and the government’s relationships with top private-sector business leaders.
However, Arce began to be sidelined at the start of 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. From the police, there was a situation like what usually happens in these social phenomena—there comes a moment when you lose control,” he said in a Univisión interview.
With his casual style—often used to confront critical journalism about the government he served—Arce also voiced internal critiques during closed-door meetings with government loyalists. 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 adviser was also named in an investigation by Spain’s National Court (Central Investigative Court No. 5) to determine whether Nicaragua’s honorary consul in Las Palmas de Gran Canaria, José Herrero de Egaña, charged 3% to 5% commissions to companies for executing projects in the country—with Arce allegedly complicit, according to reports by the newspaper El Español.
