While Minister of State for the Marine and Natural Resources in 2000, Fahey launched the Lost at Sea scheme to compensate fishermen whose vessels had been lost at sea. In 2004, following a complaint from a late applicant, the Ombudsman Emily O'Reilly recommended to the department that latecomers should be considered, saying that the schemes had a "serious defect" in having contacted some fishing families and not others. Via a freedom of information request, The Sunday Business Post found that Fahey had discussed the scheme with two constituents, who later received three quarters of the overall compensation, prior to the announcement - and had written to them about their successful applications prior to the closing date. In 2007, the Standards in Public Office Commission found no problems with Fahey's conduct. In 2009, the Ombudsman published a full report into the scheme, again recommending that late applicants receive compensation, but it was blocked from discussion in the Oireachtas by the government.
In 2000, one of Fahey's last acts as Minister of State for the Marine and Natural Resources was to approve the foreshore licence for the controversial Corrib gas project. In 2002, in connection with this project, he approved the sale of a large area of Irish national forestry at Bellanaboy to Shell Oil for the building of a gas processing site, which caused much controversy.
Investments and property
The Irish Times reported in 2006 that in 1994, when Fahey was a Senator, he became involved in establishing a hair and beauty salon business in Moscow, involving an investment of over £200,000. Fahey did not officially declare the interest and at first denied involvement with the salon. Later, he admitted a connection, saying he had travelled to Moscow "as an ordinary citizen to support the investors including my wife who were attempting to set up a hair salon there...the whole thing was part of a regional political campaign by a number of individuals to do damage to my integrity, character and good name". Fahey has invested in properties in countries including Ireland, France, the US, Dubai and Belgium. He also declared an interest in a construction company and a share portfolio in the Dáil Register of Members Interests. In June 2009, Government ministerTrevor Sargent accused Fahey in the Dáil of tax avoidance and making inappropriate decisions as a minister, and called on the Taoiseach to sack him.
Loss of seat
The 2011 general election was disastrous for Fianna Fáil and Fahey lost his seat, his first preference vote declining to 5.7%. He had said in November 2010: "I have no illusions that I will lose my seat". During a public meeting in the run up to the election he and government advisor Alan Aherne were booed and heckled.