February 3, 2017 / 4:31 PM / 6 months ago

UPDATE 1-Brazil's Temer makes cabinet changes to draw investors

(Adds Temer quotes, political context)

By Anthony Boadle

BRASILIA, Feb 3 (Reuters) - President Michel Temer promoted his point man for infrastructure investment to a ministry position on Friday and added a politician from an allied party to his cabinet to help push austerity measures through Congress.

Temer swore in his close aide Wellington Moreira Franco as minister in charge of communications and strategic affairs with a special brief to continue drumming up foreign investor interest in upgrading Brazilian infrastructure.

Moreira Franco has been named for allegedly taking a bribe in plea bargain testimony in the Car Wash graft investigation, which could land him in court, raising speculation that the promotion was aimed at partially shielding him from prosecution.

"It is just a formalization of his job, since he was already acting as a minister," said Temer, who took office last year vowing to fight corruption and reduce the number of ministries.

Moreira Franco has denied any wrongdoing. His first public statement as minister was to reject any ulterior motive for his cabinet appointment, which means that any case against him must be tried by the Supreme Court where it is likely to drag out.

In coming months, Moreira Franco will open concessions for the building and operation of roads, railways, ports and airports in Temer's strategy to draw local and foreign private investment to help pull Brazil out of a two-year recession.

Temer brought into his inner cabinet a leading lawmaker from the Brazilian Social Democracy Party, or PSDB, Antonio Imbassahy, who will be responsible for maintaining smooth relations with Congress to win approval of Brazil's costly pension system, the main cause of a bulging budget deficit that lost Brazil its investment grade credit rating in 2015.

The government hopes to pass pension reform by June, but it faces opposition. The unpopular measure will mean Brazilians have to work longer to have a full pension.

Temer, who took over from impeached leftist Dilma Rousseff last year, enjoys a majority in Congress but he has bolstered the chances of passing divisive austerity measures by adding Imbassahy to his political team.

"We will air all our differences and reach a solution that is best for the nation," Imbassahy told reporters.

The PSDB has pledged to support the government through 2018, when both they and Temer's Brazilian Democratic Movement Party, or PMDB, plan to field their own presidential candidates.

"We will have time to put Brazil back on the tracks. Whoever comes afterwards will find balanced accounts and a pacified country," Temer said in his speech. (Additonal reporting by Leonardo Goy and Lisandra Paraguassú; Editing by James Dalgleish)

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