Why we are taking a close look at Lord Steel

Deliberately or not, David Steel comes across as one of those holier-than-thou characters who occupy the centre ground in British politics. Now Lord Steel, the former Liberal Democrat leader takes his image as a politician with a conscience seriously - to the point, some might say, of self-righteousness.

When the Independent on Sunday reported last week that he had earned pounds 94,000 from working one-and-a-half to two days a week for the Countryside Movement, a body that supports foxhunting, Lord Steel was indignant. It was, he said, "a tendentious piece of journalism". Tendentious, according to the dictionary, means "having or showing an intentional tendency or bias". If, Lord Steel, that encompasses pointing out your pay from the foxhunters when most of your party want to ban the pastime, so be it.

Call us old-fashioned, but when politicians of the centre start behaving like politicians of the right we think it deserves exposure. Which is why we have been taking a close look at Lord Steel's business interests.

Lord Steel is a director of Border Television. As a former Scottish borders MP, there is a local connection, so the directorship would seem to come with the territory.

It is harder, though, to see why he should be a director of a company based in Luxembourg controlled by a publicity-shy Iraqi-born tycoon. Lord Steel declares his directorship of General Mediterranean Holding (Luxembourg), but he is not required by the rules at Westminster to go any further.

Which is a pity. We think it would be interesting to know what he earns from the company, what exactly he does for his money and how he came to know Namir Auchi, General Mediterranean's head.

General Mediterranean owns a slice of Banque Paribas, the French bank, and controls Banque Continentale, another bank, in Luxembourg. The company has extensive pharmaceutical and air transport divisions, property and construction operations.

Despite being chief and part-owner of such a huge organisation, Mr Auchi likes to keep his head down. He is believed to have come to the UK in 1981 and lives in Surrey.

His name cropped up in Italy when another company of his was an alleged go-between for a contract to supply Italian naval boats to Iraq in 1980. Similarly, he is reputed to have acted as an intermediary on the Saudi- Iraqi pipeline project in 1986 between the Iraqi government and a European business consortium.

When we called Mr Auchi for a chat he was not especially communicative. Lord Steel was a director, said Mr Auchi, "because we try to have good names on our board". They were drawn from France, Luxembourg and the US. Lord Steel was the only British politician on his board. Mr Auchi did not elaborate as to what Lord Steel did.

Likewise, when pressed about the Iraq-Italy naval boat deal, known in Italy as the "Lupo" order, he said that a letter apparently from him to the shipbuilder in Genoa asking for payment of $17.5m was not about the supply of the naval boats. Asked to discuss his involvement in the naval order he said: "No comment."

Similarly, he was reluctant to talk about the pipeline project. "Were you involved in the Iraqi-Saudi pipeline deal?" He answered: "I have no reply."

Lord Steel was not at his splendid, castellated home in Scotland. Tendentious? If you say so, Lord Steel.

Letters, Section 2 page 2