Another thought on sterilizing things in general, not just leather.
Since I work with fungi on occasion professionally, the three basic things the mycologists use to sterilize surfaces are alcohol, hydrogen peroxide, and chlorine bleach.
Now, some dyes and things are alcohol soluble, so soaking a piece of leather or clothe to sterilize it might cause problems if the color isn't fast. As with clothes, I'd recommend doing a spot test before soaking any fabric or leather in alcohol. The nice thing about alcohol is that it evaporates off, so you don't get water damage, especially if you use high proof alcohol (like 70% rubbing alcohol).
Bleach obviously causes bleaching problems, and hydrogen peroxide is a form of bleach. However, peroxide is generally milder than chlorine bleach, and peroxide naturally decays into water and oxygen (hydrogen peroxide is H2O2, water is H2O), so in many cases, peroxide is preferable to bleach. I've also soaked wood in peroxide to stop rot, and it seems to work fine. One other advantage peroxide has it that it foams as it kills rot, so you can see if a) you've got a problem, and b) the peroxide treatment is working (or at least oxidizing something
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So: peroxide, alcohol, or bleach? Spot test the material and see how the sterilant affects it before you treat. Basic point is that you've got more than one choice for stopping a fungal or bacterial problem.
F