By Anthony Boadle and Lisandra Paraguassu
BRASILIA (Reuters) - Brazil's Transparency Minister Fabiano Silveira resigned on Monday after leaked recordings suggested he tried to derail a sprawling corruption probe, the latest cabinet casualty impacting interim President Michel Temer's administration.
Silveira, the man Temer tasked with fighting corruption since he took office on May 12, announced his plans to step down in a letter, according to the presidential palace's media office. No replacement for Silveira has yet been named.
Silveira and Senate President Renan Calheiros became the latest officials ensnared by leaked recordings secretly made by a former oil industry executive as part of a plea bargain. The same tapes led to the resignation last week of Romero Jucá, whom Temer had named as planning minister.
Jucá's resignation dealt a blow to Temer's efforts to build a stable government in the wake of the May 12 suspension of leftist President Dilma Rousseff.
A government source had told Reuters on Monday that Silveira would stay in his job "for now," without elaborating.
In parts of the recordings, aired by TV Globo late on Sunday, Silveira criticizes prosecutors in the probe focused on state-controlled oil company Petróleo Brasileiro SA, known as Petrobras, which has already implicated dozens of politicians and led to the imprisonment of top executives.
In the conversation, recorded at Calheiros' home three months before Silveira became a Cabinet minister, Silveira advises the Senate leader on how best to defend himself from the probe into Petrobras.
The former head of the transportation arm of Petrobras, Sergio Machado, who is under investigation as part of the graft probe and has turned state's witness, recorded the meeting and conversations with other politicians to obtain leniency from prosecutors. Silveira was a counsellor on the National Justice Counsel, a judicial watchdog agency, at the time of the meeting.
In the report, Globo TV also said some audio indicated that Silveira on several occasions spoke with prosecutors in charge of the Petrobras case to find out what information they might have on Calheiros, which he reported back to the Senate leader.
Silveira is heard saying prosecutors were "totally lost."
OUT OF CONTEXT
A spokesman for Silveira confirmed the conversation took place, but said the excerpts were taken out of context.
"Temer's initial decision was that Silveira can continue in his post for now because he did not interfere in the investigation, he was just giving Calheiros advice," the spokesman said. He said Silveira was meeting with his lawyers.
Earlier on Monday, Ministry of Transparency staff marched to the presidential palace in Brasilia to demand Silveira's ouster and restoration of the comptroller general's office, which Temer renamed to show his commitment to fighting corruption.
All employees with management duties at the ministry resigned their posts to press their demands, according to union leader Rudinei Marques.
Protesting employees had earlier prevented Silveira from entering the ministry building. They then washed its facade with soap and water to symbolize Temer's need to clean up his government.
Temer, a centrist who was Rousseff's vice president, will meet with Brazil's prosecutor general later on Monday to discuss the leaked recordings.
Several members of Temer's cabinet are under investigation in the Petrobras probe. Rousseff, facing an impeachment trial in the Senate on charges of breaking budget laws, and others have said Temer plotted her downfall to stifle the investigation.
Temer has strongly denied the allegation.
But the recordings add weight to the argument that the new government could face declining support for Rousseff's ouster by the Senate, which needs a two-thirds majority to convict her in a trial expected to last through August.The two-year probe into billions in graft at Petrobras has led to jail time for executives from Brazil's top construction firms as well as investigations of dozens of politicians, including several members of Temer's Brazilian Democratic Movement Party, or PMDB, and Rousseff's Workers Party.
Temer served as Rousseff's vice president after she took office in 2011, and the PMDB was the strongest coalition partner for the Workers Party since 2006, when former President Luiz Inacio Lula da Silva was in power.
(Additional reporting by Brad Brooks and Guillermo Parra-Bernal; editing by Paul Simao and G Crosse)