His father, Michael Edward Molloy, was originally from Ballyhaunis, County Mayo, and ran a successful wholesale drapery business in the city.

In opposition from 1973, Molloy served as the frontbench spokesman, where he became involved in a high-profile dispute with Jim Tully, the Labour Minister for Local Government, over the controversial redrawing of constituencies, known as the "Tullymander".

Molloy, along with fellow Fianna Fáil member Brendan Crinion, used Dáil privilege to accuse Tully of having an improper commercial relationship with a builder in County Meath.

In 1986 Molloy resigned from Fianna Fáil and joined the newly formed Progressive Democrats, spearheaded by Haughey's arch-rival Desmond O'Malley.

The issue came to a head when Molloy and O'Malley made it clear they would not serve in a Cabinet that included Brian Lenihan Snr, following his controversial remarks during the 1990 Irish presidential election about alleged phone calls to President Patrick Hillery from 1982.

[3] In January 1992, Haughey faced further complications when Seán Doherty revealed information about the phone tapping of journalists dating back to 1982.

Despite this, the coalition government ended when Albert Reynolds, Haughey’s successor, called for a general election after accusing O'Malley of giving "dishonest" evidence to the Beef Tribunal.

Molloy resigned as a minister and quit politics just before the 2002 Irish general election amid controversy surrounding his involvement in the rape case of Barbara Naughton.

The controversy stemmed from a letter Molloy had sent to then Minister for Justice, John O'Donoghue, on behalf of a constituent whose relative had been convicted of rape.

His decision to leave Fianna Fáil in 1986 and join the Progressive Democrats was motivated by ideological differences, notably the party's move towards a more conservative, state-controlled economy.