Manucher Ghorbanifar, "legendary arms dealer, infamous intelligence fabricator, and central figure in the Iran-Contra scandal that almost brought down"  the Reagan administration, has been retained by the U.S. Department of Defense and Vice President Dick Cheney "as their 'man on the ground,' in order to report on any interaction and attempts at negotiations between Iranian officials" and Zalmay Khalilzad, the US ambassador to Iraq, The Raw Story reported April 20, 2006.
"Speaking on condition of anonymity," three current and former intelligence officials "identified the Iran-Contra middleman as having been put back on the payroll, acting as a human intelligence asset and monitoring any movement in discussions about Iran’s alleged burgeoning nuclear weapons program." 
On the Record: Department of State, April 21, 2006
According to the April 21, 2006, Q&A following the "Briefing on the Iran Nuclear Issue" by R. Nicholas Burns, Under Secretary of State for Political Affairs, and Robert Joseph, Under Secretary for Arms Control and International Security, held in Washington, DC:
- "QUESTION: There's been a lot of speculation over the last week that the U.S. is looking to talk to Iran beyond the narrow talks on Iraq — talk to Iran beyond the narrow confines of Iraq. There has been reports that a Mr. — an Iranian official, Mr. Nahavandian, was in town looking to meet with U.S. officials and there were also reports that the U.S. is using its longtime intermediary, Mr. Ghorbanifar. So could you speak to these reports? Is there anything to it? Is the U.S. looking to have any direct negotiations with Iran on the nuclear issue?
- "UNDER SECRETARY BURNS: There's nothing to those reports. The Iranian gentleman in question may have been wandering around Washington, but I am absolutely sure he did not have any conversations with any American Government officials and that we weren't seeking those conversations. He apparently is a green card holder, so he got himself into the United States. This is an issue for DHS now to handle and DHS is, and I'd direct your questions there. But he did not have discussions with American Government officials and we would not have met with him, had he knocked on the door of the State Department.
- "There are no discussions underway of the type that you have talked about. As you know, we do not have -- we are not talking to the Iranians directly about this nuclear issue. We're not part of the negotiations with them. When I was in Moscow, an Iranian delegation showed up and they met with the Europeans and Russians directly after our meeting, but I was not there and I was never intended to be there.
- "The only conversations we've had with the Iranians were a couple of weeks ago and we told you about this when -- after the earthquake, when I called the Iranian Ambassador to the United Nations, Dr. Zarif, to offer, on behalf of our government, humanitarian assistance. And he called me back the next day with the answer that the Iranian Government was very appreciative of the offer, but they felt they could handle that particular natural disaster on their own. That's the extent of it, so there are no discussions underway.
- "QUESTION: No discussions with Mr. Ghorbanifar either?
- "UNDER SECRETARY BURNS: No, no."
Involvement in Iran-Contra Scandal
Ghorbanifar and the CIA
- "Manucher Ghorbanifar, a man [the CIA] have wrongly characterized as a 'fabricator' out for money, when in reality he has been an extraordinary source of understanding and has sacrificed a substantial personal fortune in the cause of Iranian freedom."
"In the mid-1980s, when Ledeen was working for the National Security Council, he tangled with the CIA again over his efforts with Israeli spy David Kimche to gain the release of US hostages in Beirut through an Iranian arms dealer, Manucher Ghorbanifar, in the opening stages of what would become the Iran-Contra affair," Jim Lobe wrote June 26, 2003, in the Asia Times.
"But Ghorbanifar did not come through. Despite Ledeen's assessment of the middleman as 'one of the most honest, educated, honorable men I have ever known', he flunked four lie detector tests administered by the CIA, which had long warned that the Iranian 'should be regarded as an intelligence fabricator and a nuisance'," Lobe wrote.
"Add in the one other long-term source the Neocons favor--Manucher Ghorbanifar, the Iranian version of Chalabi, who fooled us badly during Iran-Contra and doesn't seem to be any more reliable now," Daily Kos's emptywheel commented November 15, 2005.
Ghorbanifar and Iran: 2004
Harold Rhode, desribed as a "neoconservative colleague" of Larry Franklin in the Defense Department, "and the neocon promoter Michael Ledeen had been involved in secret back-channel meetings in Paris starting as early as December 2001 with the shady Iranian arms dealer Manucher Ghorbanifar, a key figure in the Reagan-era folly remembered as the Iran-Contra affair," a Boston Globe editorial informed August 31, 2004.
"The CIA had long since proscribed dealings with Ghorbanifar. The agency had him classified as a chronic liar. When a US ambassador in Italy got wind of the meetings, he and the CIA station chief in Rome notified superiors at the State Department and the CIA." George J. Tenet, former director of the CIA, "in turn persuaded the number two official on the National Security Council, Stephen Hadley, to prohibit further meetings with the Iranian arms merchant and the so-called Iranian dissidents he was presenting to neocons avid for regime change in Tehran.
"This White House prohibition against the back-channel meetings arranged by Ghorbanifar was to no avail. There were at least two and possibly several more meetings. Ghorbanifar, living up to his reputation for indiscreet gabbiness, has boasted about further meetings to reporters for the Washington Monthly," the Globe editorial said.