Mashai is perhaps the single most-controversial figure in Ahmadi-nejad’s Administration, unpopular with conservatives and clerics and a lightning rod for criticism of the president.
It appeared to many that Ahmadi-nejad had decided to cut his losses and dismiss Mashai, but others ask why that was not done long ago. There had been no recent incident involving Mashai that would seem to justify action now.
The only announcement from the president’s office Saturday said that Ahmadi-nejad 
Baqai is another close friend of the president.
The announcement thanked Mashai for his services but did not name him to any new post.
It said Baqai would also retain his post of head of ICHTO, meaning he now holds three full time government posts.
Mashai is believed to hold some lesser posts in the government, so he will not be outside the government, but he holds no senior prestigious position any more.
Mashai had been ICHTO chief when Ahmadi-nejad was re-elected in 2009 and named him as first vice president, a very major post whose occupant actually runs the government on a day-to-day basis. The first vice president also becomes acting president if the president should die or resign in office.
There was an immediate uproar from conservatives who view Mashai as a flaming liberal. But Ahmadi-nejad held firm and stuck by his loyal aide and friend. Days passed and the uproar grew even louder. Supreme Leader Ali Khamenehi took the unusual step of publicly intervening and ordering the president to name a new first vice president. Ahmadi-nejad then made Mashai his chief of staff.
Mashai has long been a close personal friend of the president, reportedly dating back to their service together in the Pasdaran during the war. Their alliance was cemented when Mashai’s daughter married Ahmadi-nejad’s son. Mashai commonly travels with the president on official business and is often seen standing or seated beside him.
Mashai has long rubbed a number of legislators the wrong way. But he got into serious hot water several years ago when he said iranians were the friends of Israelis, just not of the Israeli government. It wasn’t clear why that inflamed so many critics, since it wasn’t much different from the long-held official view that Iran opposes Zionism but not Judaism.
Mashai later gave a speech that spoke of promoting Islam with its Iranian aspects. That upset many, especially within the clergy, who complained that there is no Iranian Islam, just Islam.