CARLOS VALDEZ

Associated Press= LA PAZ, Bolivia (AP) — A former close ally of Bolivian President Evo Morales was convicted of corruption for taking bribes while running the state-run YPFB oil company and sentenced to 12 years in prison.

The court also handed a six-year sentence in absentia to an Argentine businessman convicted of paying the bribes in a case that might never have come to light if not for an armed robbery that turned fatal.

Santos Ramirez, a longtime Morales confidante tapped by the president to run YPFB after he declared state sovereignty over Bolivia's natural gas reserves, was convicted late Thursday of corruption, influence-peddling and other crimes.

The businessman convicted of bribing him, Agustin Tomas Melano, ran the consulting firm Catler Hidrocarburos. It was a partner in a consortium to which YPFB granted a $86 million contract to build a liquification natural gas plant. Melano is a fugitive.

The scandal broke in January 2009 when Melano's chief partner in the Bolivian-Argentine consortium was shot in the face during an armed robbery of $450,000 in cash. Prosecutors said the money, drawn from a YPFB account, constituted a payoff.

The victim, Jorge O'Connor Darlach, died just outside the La Paz apartment building of a cousin of a man who was a brother-in-law of Ramirez. Police said they believed he was delivering the cash to the cousin.

The brother-in-law was a YPFB employee and both he and Ramirez's then wife, Geovana Navia, were among seven other defendants also convicted Thursday of roles in the scheme. They were sentenced to between three and nine years by a special five-member court composed of two lawyers and three private citizens.

After the scandal broke, Ramirez divorced Navia and blamed his in-laws. Navia's lawyer expressed outrage, claiming his client learned of the divorce from the press.

It is not clear how much in bribes was paid by the Catler-Uniservice consortium in which Melano and O'Connor, a Bolivian, were partners.

The case has been a major embarrassment for Morales, an Aymara Indian who is Bolivia's first indigenous president. Ramirez, of Quechua origin, had been a close collaborator of the president since before his election, serving as president of the Senate before being named chief of the state-run oil company.

In the Senate, Ramirez championed a law later enacted that gave the government a far greater share of revenues from Bolivia's natural gas, the country's No. 1 export. The change reduced the revenue share of multinational energy companies extracting the gas.

Construction of the gas liquification plant at the center of the Ramirez scandal has been transferred to a different company, while only $9.4 million of the $16.5 million that YPFB paid to Catler-Uniservice has been recovered, according the Bolivia's anti-corruption minister, Nardy Suxo.

Work on the plant in Rio Grande in Bolivia's southeastern Chaco region is only now resuming after an agreement was reached this week to end an occupation by Guarani Indians, Bolivia's third-largest indigenous group after the Aymara and Quechua.

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Associated Press writer Frank Bajak in Lima, Peru, contributed to this report.