Pel is a secretive, mysterious, devious character. Thus, there's a lot about him that we can only speculate about.
Pel Is the Secret Leader of the Third Floor RelicEdit
Third Floor Relic is said to be led by a secret appointee whose name is kept strictly secret, and reports directly to Her Majesty.
It's hard to imagine anyone better suited for this role than Pel.
Pel Is A Secret Prime MinisterEdit
This pretty much confirms the "Pel is still Prime Minister but keeps that a secret" theory. Suits him. The other speculation below is outdated.
Pel may be Paarfi
We know that Pel is no longer the Prime Minister (since there apparently isn't one at the time of Orca), so he seems to have vanished. (Note, as of Tiassa, he's back, so the following is likely outdated.) Also, the "extra-curricular activities" that Paarfi of Roundwood engages in seem to be remarkably similar to those that Pel enjoyed during The Phoenix Guards.
It would not be outside the realm of possibility that a Yendi, with no distinctive physical House characteristics, might be able to pass for a member of another house, simply by dressing and acting a certain way. And if Paarfi's works are really as popular as he lets on, the books might be part of some elaborate Yendi scheme to achieve...something.
If nothing else, during The Viscount of Adrilankha, Paarfi seems remarkably well informed about Kana's activities--and even about Pel's connections, which Kana didn't even know about. While it's certainly possible that Paarfi may have simply consulted with Pel, it should be considered that this consultation may have been restricted to the inside of a single cranium, as it were.
And yes, I remember hearing Steve say that "nobody else is anybody else"... But then, Paarfi isn't so much a "character" in the books, as he is the ostensible "author" of them, so it could be an exception.
Kragar may be PelEdit
See Speculation:Kragar for a fuller expansion of this rather pararectal notion. Pretty much disproved at this point.