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UPDATE 2-Puerto Rico's Pierluisi in 11th-hour fight to become governor

(Recasts with Pierluisi testimony)

SAN JUAN, Aug 2 (Reuters) - The man who outgoing Puerto Rico Governor Ricardo Rosselló chose to succeed him when he resigns on Friday told lawmakers his prior role advising the bankrupt island's unpopular federal overseer would not pose a conflict of interest if he were confirmed.

Rosselló agreed to step down a little more than a week ago following 12 days of street protests over corruption investigations into his administration and the revelation of vulgar text messages in which he and his allies disparaged political rivals and the island's population.

His decision this week to name Pedro Pierluisi as secretary of state, which would make the 60-year-old attorney Rosselló's successor, was met with anger by the lawmakers who have the power to confirm the pick.

That has left the leadership of the 3.2 million-person U.S. territory in doubt with hours to go before Rosselló's self-imposed 5 p.m. EDT (2100 GMT) resignation.

"I will defend you, wherever it may be, against the federal government, against the fiscal control board, anyone," Pierluisi told lawmakers on Friday, saying his years as the island's nonvoting delegate in the U.S. Congress and as a private attorney had prepared him for the role.

Puerto Rico has been rocked by crises during Rosselló's tenure, including filing for bankruptcy to restructure about $120 billion of government debt and pension obligations and a pair of back-to-back 2017 hurricanes that killed more than 3,000 people.

Scandals have already triggered resignations among multiple members of Rosselló's administration, including his former secretary of state, which set up the fight over Pierluisi and succession.

Under a 2005 Puerto Rico law, Justice Secretary Wanda Vázquez is next in line for governor in the absence of a secretary of state.

Unpopular both with lawmakers and protesters, Vázquez initially said she did not want the job but on Thursday confirmed she would accept it if it came to her.

Pierluisi said during the congressional hearing that the decision of who would be sworn in as governor later Friday "is still under evaluation" due to legal issues.

Federal officials and investors are keenly watching the uncertain political transition. Puerto Rico has $42.5 billion in federal disaster funding allocated to it, and its bankruptcy is the biggest ever in the U.S. municipal bond market.

Rosselló has spent his last days in office signing bills into law, including one that legalizes sports betting, and filling positions in the government that became vacant due to resignations over the last few weeks.

In his prior role at law firm O'Neill & Borges, Pierluisi advised the oversight board on mediation and policy-related matters and provided "key assistance" on a deal to restructure Puerto Rico's sales tax-backed debt, according to court filings.

Pierluisi told lawmakers on Friday that if confirmed he would support Rosselló's priorities including protecting Christmas bonuses for government workers, which the board eliminated from the island's current budget, and fighting against the board's proposal to reduce certain pensions.

He also vowed to improve relations with the U.S. government, which is weighing billions of dollars in federal healthcare and disaster relief funding for the island. (Reporting by Luis Valentin in San Juan, additional reporting by Karen Pierog in Chicago, writing by Andrew Hay; Editing by Scott Malone, Leslie Adler and Tom Brown)