Brazil's Rousseff to decide on sports minister

Brazil's Sports Minister Orlando Silva speaks to journalists as he denies allegations of fraud in the Sports Ministry's contracts with private companies and NGOs, in Brasilia October 17, 2011.

BRASILIA (Reuters) - Brazilian President Dilma Rousseff will decide the fate of her embattled sports minister after meeting with him on Friday to discuss the corruption allegations against him, a government source said.

"She wants to meet with him personally before deciding," said the source, who was well informed on the matter but not authorized to discuss it publicly.

Her agenda shows no meeting between the two but another source in the president's office said it could happen late afternoon or evening.

Orlando Silva is accused of arranging up to 40 million reais ($23 million) in kickbacks from government contracts to benefit himself and the Communist Party of Brazil, which is part of Rousseff's governing coalition.

The scandal threatens to further complicate already troubled preparations for the 2014 soccer World Cup and the 2016 Olympics, which Brazil hopes will showcase its emergence as an economic power.

Rousseff met with senior aides on Thursday night to review the allegations against Silva after returning from an official trip to Africa, according to the government source.

Local newspaper Estado de S.Paulo reported on Friday that the president had made up her mind after that meeting to replace Silva with another member of his party.

Silva has denied any wrongdoing and said the accusations were started by a disgruntled contractor arrested last year in an investigation into allegedly illegal fund-raising by the Communist Party.

Five cabinet members have already resigned since Rousseff took office on Jan. 1, four of them over ethics scandals that exacerbated acrimonious disputes in the ruling coalition and led allies to briefly boycott her legislative agenda.

Given the small size of the Communist Party, the scandal is unlikely to cause the same rifts in her coalition, which includes parties from the far-left to center-right.

But the matter is likely to renew a public debate over campaign financing issues, which many analysts say is at the heart of corruption among politicians.

Rousseff's hugely popular predecessor and mentor, Luiz Inacio Lula da Silva, came close to an impeachment process in 2005 over an illegal campaign financing scheme run by his ruling Workers' Party. A legislative proposal to tighten rules for campaign financing has been stuck in Congress ever since.

(Writing by Ray Colitt and Brad Haynes; Editing by Will Dunham)