the matrix - Did Agent Smith have the power to fulfill Cypher's wish?

Background:

In The Matrix (1999), there is a scene where Cypher and Agent Smith strike a deal.

Smith wants the access codes to the Zion mainframe. Cypher offers Morpheus, who knows these codes.

Cypher values ignorance (which is "bliss"), and wants to retroactively take the blue pill; getting re-connected into the Matrix, sans the memory of the real world. He also wants fame and glory.

Questions:

How would Smith be able to fulfill his end of the bargain? How was he affiliated with the machines at this point? In the third movie, The Matrix Revolutions, Smith was a self-replicating virus, and even Deus Ex Machina wanted him gone. Was he working with/for the machines before this? I always thought the agents were "self-employed" so to speak.

Answer

Agent Smith was an agent of the system until after he was destroyed by Neo at the end of The Matrix (when Neo entered his body and caused him to explode). So Agent Smith was working with the machines and was not a virus throughout The Matrix (including his meeting with Cypher). You can tell because he is wearing his earpiece throughout The Matrix but he gives it to Neo at the beginning of The Matrix Reloaded (his suit also turns black -- instead of green -- and his sunglasses change once he becomes a virus). The earpiece is symbolic of his status as a "slave" to the system; when he hands over the envelope with his earpiece at the beginning of The Matrix Reloaded he says:

I have something for him, a gift. You see, he set me free...

Agent Smith:

Smith (virus):

To fulfill Cypher's wish, the machines would have to re-insert Cypher into the Matrix and erase his memories. There is an example of the machines re-inserting a red pill into the Matrix in the comic Saviors, though in that case the red pill's memories were not erased (he didn't request it). The machines have also demonstrated remarkable abilities to erase the memories of humans (e.g. they can reload the entire Matrix every time The One completes his cycle) so the machines are capable of erasing Cypher's memories.

Since Agent Smith was still working with the machines at the time of his meeting with Cypher, and the machines are capable of granting Cypher's wish, it would have been possible for Agent Smith to fulfill his end of the bargain.