Ahmed Wali Karzai, the brother of the embattled Afghan president and a suspected drug trafficker, has been on the CIA payroll for most of the past eight years, The New York Times says.
The US spy agency pays Karzai for a variety of services, the newspaper said on Tuesday, such as fielding recruits for an Afghan paramilitary force operating at the CIA's direction in and around his home city of Kandahar, a Taliban stronghold.
He also helps the CIA contact and sometimes meet Taliban followers.
Karzai, who is said to have ties to Afghanistan's lucrative illegal opium trade, has a "wide-ranging" relationship with the CIA, the Times said, citing US officials.
On top of helping the agency operate the paramilitary group that targets suspected violent militants - the Kandahar Strike Force, Karzai is also paid for allowing the CIA and US Special Operations forces to rent a large compound outside Kandahar that once served as the home of Taliban founder Mullah Omar.
"He's our landlord," a senior US official told the newspaper.
The CIA declined to comment when contacted by AFP.
Karzai denied receiving CIA payments or playing any role in the booming opium trade that helps fund the Taliban-led insurgency.
"I don't know anyone under the name of the CIA," he told the newspaper.
"I have never received any money from any organisation. I help, definitely. I help other Americans wherever I can. This is my duty as an Afghan."
The report came amid increasingly tense ties between US President Barack Obama's administration and Afghan President Hamid Karzai, long a darling of the West but whose legitimacy has been shaken by a fraud-marred first round of elections in August.
A run-off has been set for November 7.
Some US officials argued that relying on Ahmed Wali Karzai undermines Washington's efforts to help develop an effective and reliable Kabul government that can stand on its own.
"If we are going to conduct a population-centric strategy in Afghanistan, and we are perceived as backing thugs, then we are just undermining ourselves," Major General Michael Flynn, the top US military intelligence official in Afghanistan, told the daily.
While some US officials said Karzai was likely linked to drug trafficking, others said the intelligence was inconclusive.
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