He and others were particularly concerned that George Colley would succeed Lynch as leader of Fianna Fáil and Taoiseach.
Fahey was instrumental in forming the so-called "gang of five" with Albert Reynolds, Mark Killilea, Tom McEllistrim and Seán Doherty.
[4] This group began to lobby the Fianna Fáil parliamentary party on behalf of Charles Haughey, whom they regarded as a better choice for leader than Colley.
[citation needed] Haughey was the eventual winner of the leadership contest and rewarded Fahey by appointing him Minister of State at the Department of Environment, a post he held from 1979 to 1981.
He was annoyed at his running mate in the constituency, and subsequently voted against the proposed Fianna Fáil–Progressive Democrats coalition; this action lost him the party whip.