By Lisandra Paraguassu and Leonardo Goy

BRASILIA (Reuters) - One of Brazilian President Michel Temer's closest aides resigned on Wednesday following allegations he had received graft money from engineering conglomerate Odebrecht in a widening corruption scandal that is besieging the government.

Lawyer José Yunes, a friend of the president for 50 years, denied the allegations in a letter to Temer but said he could not stay on as his special advisor, according to a copy of the letter released by the government.

Another key Temer aide, infrastructure investment secretary Wellington Moreira Franco, denied that he planned to quit after being named in the same plea bargain testimony by a former Odebrecht executive.


"I am dedicated to helping draw up stimulus measures and strengthening the infrastructure concessions program. I do not abandon battles when I believe in the cause," he said through a spokesman.

A source close to Moreira Franco, however, told Reuters he had drafted his resignation letter and considered leaving to lessen the fallout for the government, which has lost four ministers to graft allegations in the six months since Temer took over from impeached leftist Dilma Rousseff.

If Moreira Franco quits, it would be a big blow to Temer's scandal-buffeted government since he is the architect of plans to draw private investment for a badly needed upgrading of Brazil's roads, railways, ports and airports.

Moreira Franco was named in the plea bargain statement as having received illegal campaign funds for the party.

The testimony given to prosecutors by Odebrecht's former government affairs director Claudio Melo Filho is part of the massive corruption scandal centered on bribes and political kickbacks at state-run oil company Petrobras.

Temer's political survival is threatened by allegations that he, members of his Cabinet and leaders of his PMDB party received payments from Odebrecht SA [ODBES.UL], as political contributions or rewards for passing legislation favoring the firm.

Odebrecht, Brazil's largest construction and engineering firm that prosecutors say benefited the most from the Petrobras graft scheme, has signed a leniency deal that includes plea statements by executives and employees.

The deal has sent shudders through Brazil's political establishment which is bracing for more leaked statements likely to implicate as many as 200 politicians.

According to Melo Filho's testimony, the first to be leaked to Brazilian media, Temer himself asked the company for 10 million reais ($3 million) in political contributions for the 2014 election campaign.

Part of the undeclared money was delivered in cash to Yunes' law office in Sao Paulo, Melo Filho claimed in his plea bargain.

(Additional reporting by Rodrigo Viga Gaier in Rio de Janeiro; Writing by Anthony Boadle; Editing by Jeffrey Benkoe and Alistair Bell)

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