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.

Arts & Entertainment
tvGrace Dent on TV
Voices
Actor Zac Efron
voicesTopless men? It's as bad as Page 3, says Howard Jacobson
Sport
Emmanuel Adebayor, Tim Sherwood and Hugo Rodellega
sportThe latest news and scores
News
Brand said he
people
VIDEO
Voices
For the Love of God (2007) The diamond-encrusted skull that divided the art world failed to sell for
its $100m asking price. It was eventually bought by a consortium
which included the artist himself.
voicesYou can shove it, Mr Webb – I'll be having fun until the day I die, says Janet Street-Porter
Sport
Mercedes driver Lewis Hamilton of Britain drives in the rain during the qualifying session of the Chinese Formula One Grand Prix in Shanghai
sport
Extras
indybestFake it with 10 best self-tanners
Arts & Entertainment
Madonna in her music video for 'Like A Virgin'
music... and other misheard song lyrics
News
Much of the colleges’ land is off-limits to locals in Cambridge, with tight security
educationAnd has the Cambridge I knew turned its back on me?
Sport
Steven Gerrard had to be talked into adopting a deeper role by his manager, Brendan Rodgers
sportThe city’s fight for justice after Hillsborough is embodied in Steven Gerrard, who's poised to lead his club to a remarkable triumph
News
peopleOrlando Bloom the pin-up hero is making a fresh start
News
Who makes you happy?
happy listSend your nominations now for the Independent on Sunday Happy List
Life & Style
The North Korean TV advert for Taedonggang beer, that became a YouTube hit
food + drinkAnd what did it take to set up a taste test back in Wiltshire?
Arts & Entertainment
filmLife for Leslie Mann's can be challenging sometimes
Voices
For music lovers: John Cusack with his vinyl collection in 'High Fidelity'
voices...but don't forget rest of the year
News
The energy drink MosKa was banned for containing a heavy dose of the popular erectile dysfunction Levitra
news
Have you tried new the Independent Digital Edition iPad app?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

1st Line Helpdesk Engineer Apprentice

£150.00 per week: QA Apprenticeships: This company has been providing on site ...

Telesales & Sales Support Apprentice

£221.25 per week: QA Apprenticeships: This company is a well established Inter...

Client Relationship Manager - SQL, Python

£40000 - £50000 per annum: Harrington Starr: Client Relationship Manager - SQL...

**Financial Services Tax**

£35000 - £50000 per annum: Pro-Recruitment Group: Take your chance to join the...

Day In a Page

How I brokered a peace deal with Robert Mugabe: Roy Agyemang reveals the delicate diplomacy needed to get Zimbabwe’s President to sit down with the BBC

How I brokered a peace deal with Robert Mugabe

Roy Agyemang reveals the delicate diplomacy needed to get Zimbabwe’s President to sit down with the BBC
Video of British Muslims dancing to Pharrell Williams's hit Happy attacked as 'sinful'

British Muslims's Happy video attacked as 'sinful'

The four-minute clip by Honesty Policy has had more than 300,000 hits on YouTube
Church of England-raised Michael Williams describes the unexpected joys in learning about his family's Jewish faith

Michael Williams: Do as I do, not as I pray

Church of England-raised Williams describes the unexpected joys in learning about his family's Jewish faith
A History of the First World War in 100 moments: A visit to the Front Line by the Prime Minister's wife

A History of the First World War in 100 moments

A visit to the Front Line by the Prime Minister's wife
Comedian Jenny Collier: 'Sexism I experienced on stand-up circuit should be extinct'

Jenny Collier: 'Sexism on stand-up circuit should be extinct'

The comedian's appearance at a show on the eve of International Women's Day was cancelled because they had "too many women" on the bill
Cannes Film Festival: Ken Loach and Mike Leigh to fight it out for the Palme d'Or

Cannes Film Festival

Ken Loach and Mike Leigh to fight it out for the Palme d'Or
The concept album makes surprise top ten return with neolithic opus from Jethro Tull's Ian Anderson

The concept album makes surprise top ten return

Neolithic opus from Jethro Tull's Ian Anderson is unexpected success
Lichen is the surprise new ingredient on fine-dining menus, thanks to our love of Scandinavian and Indian cuisines

Lichen is surprise new ingredient on fine-dining menus

Emily Jupp discovers how it can give a unique, smoky flavour to our cooking
10 best baking books

10 best baking books

Planning a spot of baking this bank holiday weekend? From old favourites to new releases, here’s ten cookbooks for you
Jury still out on Manchester City boss Manuel Pellegrini

Jury still out on Pellegrini

Draw with Sunderland raises questions over Manchester City manager's ability to motivate and unify his players
Ben Stokes: 'Punching lockers isn't way forward'

Ben Stokes: 'Punching lockers isn't way forward'

The all-rounder has been hailed as future star after Ashes debut but incident in Caribbean added to doubts about discipline. Jon Culley meets a man looking to control his emotions
Mark Johnston: First £1 million jackpot spurs him on

Mark Johnston: First £1 million jackpot spurs him on

The most prize money ever at an All-Weather race day is up for grabs at Lingfield on Friday, and the record-breaking trainer tells Jon Freeman how times have changed
Ricky Gervais: 'People are waiting for me to fail. If you think it's awful, then just don't watch it'

Ricky Gervais: 'People are waiting for me to fail'

As the second series of his divisive sitcom 'Derek' hits screens, the comedian tells James Rampton why he'll never bow to the critics who habitually circle his work
Mad Men series 7, TV review: The suits are still sharp, but Don Draper has lost his edge

Mad Men returns for a final fling

The suits are still sharp, but Don Draper has lost his edge
Google finds a lift into space will never get off the ground as there is no material strong enough for a cable from Earth into orbit

Google finds a lift into space will never get off the ground

Technology giant’s scientists say there is no material strong enough for a cable from Earth into orbit