CARACAS - President Hugo Chávez scrambled to distance his government from a brewing banking and corruption scandal that claimed one of his closest collaborators on Sunday and could claim other top officials.

Speaking on his weekly television show, Mr. Chávez announced the resignation of Jesse Chacón, one of the government's most powerful officials, who was serving as science and technology minister. The announcement came a day after the arrest of Mr. Chacón's brother, Arné Chacón, president of Banco Real and Baninvest, two of seven small banks taken over by the Venezuelan government last week.

"I respect and love Jesse very much, and I know he understands," said Mr. Chávez. He said Mr. Chacón's resignation freed the official from suspicion in the banking scandal.

Mr. Chávez said he had spoken directly to the government's top prosecutor, Luisa Ortega, and requested that she move quickly to punish the people responsible for the failed banks. Mr. Chávez also said he told the Venezuelan secret police to swiftly imprison Arné Chacón.

"I'm very sorry that he is the brother of a minister, but we're showing that no one here is untouchable," Mr. Chávez said.

To read full Wall Street Journal story — Go Here Now.