He was one of the Empire's 3 generals. The other two being Leo and Celes. I'm pretty sure that was stated somewhere.

He just wasn't given as much importance/respect and was kept out of the way, so to speak, because well...he was insane. He was however, the only one of them that lacked a conscience. So he is given a lot more free-reign later on by Ghestal because he knew Kefka was the only one of his generals evil enough to go through with his ultimate plans. This of course, proves to be Ghestal's own undoing.