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. Last Updated: 07/27/2016

Scandal Prompts Resignation of Canada's Defense Minister

TORONTO -- Canadian Prime Minister Jean Chretien dropped Defense Minister Art Eggleton from his Cabinet on Sunday after two controversies this year that have embarrassed the government.

Eggleton's departure is the first by a Cabinet minister tainted by scandal in Chretien's eight-plus years in power, and the prime minister said such problems were to be expected.

Chretien said the government ethics counselor found that Eggleton violated ethics guidelines by giving a 36,500 Canadian-dollar ($24,000) contract to a woman he once dated to compile a 14-page report on post-traumatic stress disorder in the military.

He said Eggleton initially resisted his ouster, then submitted a letter of resignation that Chretien accepted.

Earlier Sunday, Eggleton defended the contract, saying the money came from his discretionary fund and that Maggie Maier, president of One World Communications, was qualified to compile the report. There was no immediate comment from Eggleton after the shuffle, carried out in a hastily scheduled Parliament ceremony in which the new ministers pledged an oath of office.

Eggleton survived another scandal in January regarding Canadian special forces' activity in Afghanistan.

Chretien also moved Don Boudria from the public works portfolio in a Cabinet shuffle intended to halt mounting criticism of alleged cronyism by his government. Boudria was returned to his previous position as the Liberal Party's leader in the House of Commons, which is still in the Cabinet.

The accusations against Eggleton and Boudria followed a government audit that revealed mishandling of contracts worth about 1.6 million Canadian dollars to a company that supports Chretien's Liberal Party.

Eggleton was replaced by financial services junior minister John McCallum, while Boudria traded places with Ralph Goodale, the Liberal Party leader in the House of Commons.