Brazil's Rousseff picks allies for second-term cabinet

BRASILIA (Reuters) - Brazilian President Dilma Rousseff appointed 13 new ministers on Tuesday, choosing allied politicians in a cabinet reshuffle while trying to avoid any names that could be linked to a widening corruption scandal at state-run oil company Petrobras. Rousseff will replace Energy Minister Edison Lobao, whose name has appeared in reports of the bribery investigation, with Eduardo Braga, a senator of his same PMDB party, the country's largest, a statement from the president's office said. Other politicians of the PMDB, a key ally of Rousseff's Workers' Party in Congress, were picked to head other ministries including the ports, civil aviation and agriculture. The second Rousseff administration starts on New Year's Day. Rousseff has been careful to avoid picking anyone whose name has been linked to the corruption probe. Investigators say billions of dollars in bribes were funneled to parties of the ruling coalition. The president of Congress' lower house, Henrique Eduardo Alves, a member of the PMDB, said on Tuesday he will not take any ministry until his name has been cleared. So far 39 people have been indicted on charges that include corruption, money laundering and racketeering. Prosecutors are expected next year to name politicians who are suspects. On Tuesday, the country's top prosecutor declined to provide Rousseff with names, a day after she said she wanted to check cabinet appointments with the prosecutor. Prosecutors say the corruption cost taxpayers and minority investors in Petrobras about 10 billion reais ($3.70 billion) in kickbacks. Appointing allied politicians for the cabinet is crucial for Rousseff to keep the peace within the ruling coalition, which has at times rebelled against her in Congress. That coalition lost ground to dozens of smaller parties in October's general election, which could further complicate Rousseff's efforts to make tough economic adjustments next year. Rousseff named the outgoing governor of the state of Bahia, Jaques Wagner, a member of her Workers' Party, to the defense ministry. The leftist leader has already picked most of her new economic team, appointing Joaquim Levy, a banker with no political affiliation, to the finance ministry in November. He will formally take the post in January. ($1 = 2.7029 Brazilian reais) (Reporting by Reese Ewing; Writing by Alonso Soto; Editing by David Gregorio)