Who, in The Lord of the Rings, was the most effective liar?

[Raynor]

Originally Posted by Nogrod

Saruman thinks he has a chance to world domination and Sauron feeds his dreams to make him an auxiliary in his own war against the free races promising him might - and letting him believe he can be the master of his own destiny.

I don't think that Sauron fed his dreams through lies. In fact, as UT tells us, he was furious to find out about Saruman lying and misleading his servants, but he had to bid his time. I don't know that Sauron promised Saruman any might; but even if he did, it didn't matter because Saruman still didn't believe him - which is what concerns this thread: the Jack-of-all-trades still planned and tried to usurp and replace Sauron and he still mislead his servants. Thus, Sauron's lies were ineffectual, since what he accomplished through them, if he did use them, was to have a snake in his own house, wrongfully trusted for some while.

So he was lured to be a pawn of Sauron.

I don't think there was any luring of Saruman by Sauron to use the palantir - which is what trapped him. Later, Sauron used persuasion (which does not necessarily imply lying, we have no evidence of that, and even if it were, as pointed previously, it didn't work, quite the contrary) and daunting - not lying.