Following the re-election of the incumbent government at the 2002 general election, Fahey was demoted to the post of Minister of State at the Department of Enterprise, Trade and Employment with responsibility for Labour Affairs.
In 2004, following a complaint from a late applicant (who had been turned down), 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.
[5][6] 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.
[7][8] 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[9] Corrib gas project.
[10] 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.
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".
[15][16] In June 2009, Green Party leader Trevor Sargent accused Fahey in the Dáil of tax avoidance and making inappropriate decisions as a minister, and called on the Taoiseach to sack him.