We haven't met Colonel Wallis, but he's rather important here. We have previously heard negative reports of Mr Elliot's past, but now Mr Elliot refutes them:

Upon the hint of having spoken disrespectfully or carelessly of the family and the family honours he was quite indignant... He could refer Sir Walter to all who knew him...

Who are these 'all who knew him' who will vouch for his character? Only Col Wallis is specifically mentioned:

a very intimate friend of his, a Colonel Wallis, a highly respectable man, perfectly the gentleman (and not an ill-looking man, Sir Walter added), who was living in very good style in Marlborough Buildings, and had, at his own particular request, been admitted to their acquaintance through Mr. Elliot...Colonel Wallis had known Mr. Elliot long, had been well acquainted also with his wife...

This appears to be Sir Walter's assessment of Col W, so are we to credit it? How long exactly HAS Col W known Mr Elliot? Did he know him during that period when Mr Elliot was supposed to have spoken disrespectfully of Sir W & Eliz, or only afterward? Does Sir W judge him to be respectable simply because he is not ill-looking & living in good style? Sir W is acquainted with him only through Mr Elliot. Are we to trust Col W's opinion, or are he and Mr Elliot conspiring together? Has he been duped himself by Mr E? Or are they both honest & respectable gentlemen?