Australian minister quits over brother's firm

Australia's defence minister quit today after failing to distance himself from negotiations between the defence department and a US health insurer represented by his brother.

Trouble-prone Joel Fitzgibbon is the first minister to quit or be fired from Prime Minister Kevin Rudd's popular government since it was elected in 2007. He will remain in the government as a junior lawmaker.

Rudd said a new defence minister will be chosen to represent Australia at a Nato meeting next week. Rudd would not say whether he would use the resignation as an opportunity to make wider changes to his Cabinet.

The resignation came after an army general responsible for defence health services told the Senate in the course of a routine inquiry Wednesday that he had met in Fitzgibbon's office last year with ministerial staff and the minister's brother, Mark Fitzgibbon, who was representing US health insurer Humana. Defence contracts were discussed but none was signed as a result of the meeting.

Fitzgibbon wrote in his resignation letter that he had avoided being a part of the negotiations to ensure he had no conflict of interest as a minister.

"I am not absolutely satisfied that that objective was achieved to the extent necessary" for a minister, Fitzgibbon wrote to Rudd.

"To protect the integrity of the government, I have decided to resign," he added.

Rudd described Fitzgibbon as a "first class defence minister," but said resigning "was the right thing to do."

"It's an important reminder to us all that standards of accountability must be kept high," Rudd said.

Fitzgibbon was a principal draftsman behind a 30-year defence plan released last month to buy 100 state-of-the-art US jet fighters and to double the size of Australia's submarine fleet in a bid to keep pace with an Asian military buildup.

Rudd reprimanded Fitzgibbon earlier this week after he acknowledged he failed to publicly disclose that one of his hotel bills was paid for by a company run by his brother.

Fitzgibbon apologized in March for similarly forgetting to declare gifts of airfares and a suit from a businesswoman.