PR peer pays out over billionaire 'smear'

Lord Malloch-Brown, a former Labour minister, was left humiliated last night after he and the PR company he works for agreed to make an out-of-court settlement to the controversial Israeli mining billionaire Beny Steinmetz over sensational allegations of a smear campaign.

Mr Steinmetz had been a client of the PR firm FTI, formerly known as Financial Dynamics, but alleged that Lord Malloch-Brown, FTI's chairman of Europe, Middle East and Africa, had been leaking confidential information about him to his enemy George Soros. Mr Soros had, Mr Steinmetz claims, been funding corruption investigations into his activities in the West African state of Guinea. There is no claim of wrongdoing against Mr Soros in the Steinmetz writ.

Lord Malloch-Brown, who served as the deputy to Kofi Annan, the former United Nations secretary-general, is closely involved with several of Mr Soros's business and charitable interests, such as the Open Society Foundations, of which he is a board member.

Rather than fight the claims in court, Lord Malloch-Brown and FTI yesterday opted to settle, making a payment of €90,000 (£76,000) to Mr Steinmetz's company and paying both sides' costs so far. Those are believed to run to hundreds of thousands. They said the settlement was not an admission of liability, and they continued to reject strongly the allegations of impropriety.

However, the decision not to fight the claim was hailed as a victory by Mr Steinmetz. His spokesman said: "When you are paid to advise people as their PR representative, you are not supposed to leak information about them to their enemies. It's as simple as that."

The settlement came as Mr Steinmetz fights to retain control of mining assets sold to him by the former president of Guinea. An investigation set up by the new government, which Mr Steinmetz claims is part-funded by a Soros charity, alleges that Mr Steinmetz paid a fraction of the true value of the mine. It was a deal that allegedly included a $2.5m (£1.6m) "commission" to the president's wife and the gift of a $60,000 diamond-studded gold watch – allegations Mr Steinmetz denies.

Meanwhile, US prosecutors are investigating whether a man linked to Mr Steinmetz's organisation paid Guinean officials as much as $12m.

FTI lost $36m last year and, insiders said, did not have the stomach for a costly legal battle with the deep-pocketed Mr Steinmetz.

Lord Malloch-Brown has courted controversy many times in his career, including a diplomatic row with the US while he was at the UN, when he accused the country of allowing "too much unchecked UN-bashing and stereotyping". Included in the Steinmetz writ is the allegation that Lord Malloch-Brown described him privately as "corrupt", and that members of the Steinmetz account team at FTI said Mr Soros has a "personal obsession" about Mr Steinmetz.

Start your day with The Independent, sign up for daily news emails
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

SThree: Talent Acquisition Consultant

£22500 - £27000 per annum + OTE £45K: SThree: Since our inception in 1986, STh...

Recruitment Genius: Experienced Financial Advisers and Paraplanners

Negotiable: Recruitment Genius: This extremely successful and well-established...

Guru Careers: FX Trader / Risk Manager

Competitive with monthly bonus: Guru Careers: We are seeking an experienced FX...

Day In a Page

Seifeddine Rezgui: What motivated a shy student to kill 38 holidaymakers in Tunisia?

Making of a killer

What motivated a shy student to kill 38 holidaymakers in Tunisia?
Ajmer: The ancient Indian metropolis chosen to be a 'smart city' where residents would just be happy to have power and running water

Residents just want water and power in a city chosen to be a ‘smart’ metropolis

The Indian Government has launched an ambitious plan to transform 100 of its crumbling cities
How to stop an asteroid hitting Earth: Would people co-operate to face down a global peril?

How to stop an asteroid hitting Earth

Would people cooperate to face a global peril?
Just one day to find €1.6bn: Greece edges nearer euro exit

One day to find €1.6bn

Greece is edging inexorably towards an exit from the euro
New 'Iron Man' augmented reality technology could help surgeons and firefighters, say scientists

'Iron Man' augmented reality technology could become reality

Holographic projections would provide extra information on objects in a person's visual field in real time
Sugary drinks 'are killing 184,000 adults around the world every year'

Sugary drinks are killing 184,000 adults around the world every year

The drinks that should be eliminated from people's diets
Pride of Place: Historians map out untold LGBT histories of locations throughout UK

Historians map out untold LGBT histories

Public are being asked to help improve the map
Lionel, Patti, Burt and The Who rock Glasto

Lionel, Patti, Burt and The Who rock Glasto

This was the year of 24-carat Golden Oldies
Paris Fashion Week

Paris Fashion Week

Thom Browne's scarecrows offer a rare beacon in commercial offerings
A year of the caliphate:

Isis, a year of the caliphate

Who can defeat the so-called 'Islamic State' – and how?
Marks and Spencer: Can a new team of designers put the spark back into the high-street brand?

Marks and Spencer

Can a new team of designers put the spark back into the high-street brand?
'We haven't invaded France': Italy's Prime Minister 'reclaims' Europe's highest peak

'We haven't invaded France'

Italy's Prime Minister 'reclaims' Europe's highest peak
Isis in Kobani: Why we ignore the worst of the massacres

Why do we ignore the worst of the massacres?

The West’s determination not to offend its Sunni allies helps Isis and puts us all at risk, says Patrick Cockburn
7/7 bombings 10 years on: Four emergency workers who saved lives recall the shocking day that 52 people were killed

Remembering 7/7 ten years on

Four emergency workers recall their memories of that day – and reveal how it's affected them ever since
Humans: Are the scientists developing robots in danger of replicating the hit Channel 4 drama?

They’re here to help

We want robots to do our drudge work, and to look enough like us for comfort. But are the scientists developing artificial intelligence in danger of replicating the TV drama Humans?