Yet there he was last month walking alongside Supreme Leader Ayatollah Ali Khamenei and greeting dignitaries at a global gathering of so-called nonaligned nations in Tehran. Rafsanjani was then seated next to the main VIP guest, U.N. Secretary-General Ban Ki-moon.
It was another renaissance moment for Iran's great political survivor. But this time it carried added intrigue as a possible sign the 78-year-old eminence grise, who favors a moderate approach toward the West, could have at least one major power play left.
With elections in nine months to select the successor for Mahmoud Ahmadinejad—who is making his last presidential visit to the U.N.'s General Assembly next week—speculation is rising on who will be the ruling system's choice and, therefore, the instant front-runner.
Until recently, Rafsanjani had not been mentioned among the top possible contenders to replace Ahmadinejad, who must step aside because of term limits. Rafsanjani, as always, keeps his intentions very closely guarded. He hasn't spoken publicly about aspirations to return to the presidency 16 years after leaving office, or becoming the powerful
That hasn't stopped his name from increasingly creeping into the mix—particularly after his high-profile role during the late August summit of the Nonaligned Movement, a Cold War-era group that Iran seeks to transform into an alternative voice to Western power as Tehran battles pressures over its nuclear program.
"He appeared as the second most powerful figure of the ruling establishment for international guests," wrote Sadegh Zibakalam, a professor of politics at Tehran University, in a post on his website. "This was a very heavy and bitter blow to hardliners. His participation in the next presidential elections is the main concern of hardliners."
The thinking goes that Iranian leadership will do whatever it takes to avoid the chaos and violence that greeted Ahmadinejad's disputed 2009 re-election. That means likely blocking any pro-reform candidates and possibly seeking a more centrist figure than those mentioned as apparent hopefuls, including Tehran Mayor Mohammad Bagher Qalibaf and former Revolutionary Guard commander Mohsen Rezaei.
This could open room for a Rafsanjani redux as one of the few establishment leaders capable of reaching out to Iran's simmering opposition while also trying to calm the West, where Rafsanjani built a reputation as a pragmatic leader during his years as president from 1989-97.
A potential run by Rafsanjani—or a protégé he backs—would likely be received favorably in Washington and among Western allies. Although part of the ruling system for decades, he is also widely viewed as more flexible and possibly more in tune with the West than most of the other old guard.
"We need détente and delicacy in our relations with the world," said a message on his personal website last month.
His family has extensive international ties through university studies in Britain and a vast business network that includes construction companies, an auto assembly plant, real estate holdings and a private airline. In 2003, he was listed among Iran's "millionaire mullahs" by Forbes magazine.
His image, however, also has darker undertones. He was named by prosecutors in Argentina among Iranian officials suspected of links to a 1994 bombing of a Jewish center in Buenos Aires that killed 85 people. Some Iranian reformers accused him of a role in the slaying of liberals and dissidents during his presidency.
In many ways, the presidency is less powerful than his oligarch status. The president has a limited say in critical policy decisions such as the nuclear program or military affairs, which are overseen directly by the ruling system and its protectors. Yet the president is seen as the country's main international envoy and is often used to set the tone for dealings with the West.
"The discourse of the Iranian leadership would differ" under Rafsanjani, said Hamid Reza Shokoohi, editor of the pro-reform Mardomsalari newspaper. "Both sides will be able to enter nuclear talks with more goodwill."
Rafsanjani has not taken a front-line role in Iran's showdowns over its nuclear program, which the West and allies fear could lead to nuclear weapons. Iran insists it seeks reactors for energy and medical use only.
Majid Deljou, a political columnist at Tehran's Hamshahri daily, said the main purpose of Rafsanjani's presence at the Nonaligned summit was to show unity among Iranian leaders. This holds especially true for Rafsanjani and Ahmadinejad, who have been in open feud since Rafsanjani lost the presidential race in 2005.
Rafsanjani's daughter, Faezeh, spent a few hours in detention and his younger son, Mahdi, went into self-exile in 2009 over allegations of links to protests after Ahmadinejad's re-election. Rafsanjani's older son, Mohsen, was fired from his post as chief of Tehran's subway last year.
It's left Rafsanjani a bitter critic of Ahmadinejad and his bombastic style. Rafsanjani, meanwhile, has been quietly promoting his version of political healing: trying to redress claims by reformists that the ruling theocracy has hijacked Iran's elections.
"Free, transparent and lawful elections could solve a big portion of the country's problems," Rafsanjani told university students last week. "It increases trust among people and supporters of the system while disarming foreign enemies."
Rafsanjani's backers also have been encouraged by a ruling last month by the Guardian Council, a group that vets candidates, that there are no age limits on running for president.
Some predict, however, that Rafsanjani is more interested in trying to shape the outcome of the election than in reclaiming the presidency.
"He will be a kingmaker," said Ali Reza Khamesian, political editor of the independent Magreb newspaper. "Rafsanjani has the capacity to open deadlocks and remove problems inside and out."
A senior official in the Guardian Council said: "We need someone in the post with Rafsanjani's policies but hardworking like Ahmadinejad." The official spoke on condition of anonymity since he was not authorized to comment publicly.
But Rafsanjani also has his own political baggage.
He angered the ruling clerics with his open support for Ahmadinejad's reformist challenger in 2009, Mir Hossein Mousavi, who is now under house arrest along with another opposition figure, Mahdi Karroubi.
That cost Rafsanjani a coveted place among the Friday prayer leaders at Tehran University. He then came under heavy pressure from all sides, including accusations of financial corruption that were never substantiated.
Last year, Rafsanjani lost his position as the head of the Assembly of Experts, a powerful clerical body charged with choosing or dismissing Iran's supreme leader. He is still a member of the council—and commands a significant political following.
Some of his appeal is built around nostalgia for the 1990s, when the economy was not crippled by sanctions.
But there also are groups that will oppose any moves by Rafsanjani because of his association with reformers.
"By turning to Rafsanjani," hardline political analyst Mohammad Hossein Asadagha told the semiofficial Fars news agency, "reformists are trying to gradually return to the political scene."
Murphy reported from Dubai, United Arab Emirates.