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Brazil ports bribery probe ensnares president's friends

RIO DE JANEIRO (Reuters) - Police arrested two close friends of Brazilian President Michel Temer on Thursday in an investigation into alleged corruption involving a decree regulating the country’s ports, their lawyers told Reuters.

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Temer has denied any wrongdoing in the case in which prosecutors suspect bribes were paid in exchange for the extension of concessions in the port of Santos, Latin America’s busiest.

But the scandal could complicate Temer’s plans to run in the October presidential election. A Supreme Court judge lifted the secrecy on his bank accounts last month, bringing the investigation closer to home.

Police arrested José Yunes, a longtime aide to Temer who worked in the president’s office until December 2016, and Joao Batista Lima, a retired military police colonel associated with Temer since he was public security chief for Sao Paulo state three decades ago.

Also arrested were Celso Greco, owner of the logistics firm Rodrimar SA, and Wagner Rossi, a former head of the Sao Paulo state docks company Codesp.

Lawyers for Temer’s friends said the arrests were unwarranted because their clients were innocent.

Police are investigating whether Temer took bribes in exchange for shaping the decree in a way that would benefit Rodrimar, which operates some services in Santos.

The decree Temer signed last May extended contracts for companies operating at the port from 25 to 35 years with an option for renewing the concession for up to 70 years.

Temer’s minister of political affairs, Carlos Marun, said the president’s name would be cleared. “We’re sure of one thing: that decree never benefited Rodrimar,” he told reporters.

The federal police declined to comment on the arrests.

In February, the then-head of federal police told Reuters that the investigation had found no evidence of corruption. He later resigned under a barrage of criticism for suggesting the case could be shelved.

Reporting by Pedro Fonseca; Additional reporting by Lisandra Paraguassu in Brasília; Writing by Bruno Federowski; Editing by Franklin Paul and Leslie Adler