After the 1969 general election, O'Malley was appointed
Parliamentary Secretary to the Taoiseach,
Jack Lynch, and
Parliamentary Secretary to the Minister for Defence,
Jim Gibbons. O'Malley had a central role in the case for the prosecution against the government ministers
Charles Haughey and Neil Blaney that arose from the
Arms Crisis of 1970. Both ministers were acquitted in a trial at the
Central Criminal Court. It has been alleged by numerous scholars that O'Malley was aware of alleged efforts by Taoiseach Jack Lynch's efforts to procure arms for northern Nationalists, to be kept under lock and key at a secure location at a monastery in County Cavan, and the training of young men, hand-picked by the Citizens' Defence Committees to be instructed in their use by the Irish Defence Forces. This is subject to much controversy and there is no agreement for this. It has been further alleged that O'Malley was aware of a ministerial memo that stated: A transport of army trucks with 500 rifles, 80,000 rounds of ammunition and respirators was indeed sent to the North but did not cross the border, in April 1970 (following orders Defence Minister Gibbons issued in February of that year), instead the trucks were parked at Aitken barracks in Dundalk. Owing to a lack of sufficient space, all but 150 rifles were returned south immediately, and the remainder in May 1970, ostensibly due to a fear the barracks could be raided by the IRA. As O'Malley was a junior minister in the Dept. of Defence, it is highly unlikely that he was not aware of the relevant handwritten memo suggesting their removal from Aitken Barracks. This memo, as with the one above, was not admitted as evidence at the Arms Trial, perhaps because it might have aroused suspicion as to the Irish Department of Defence's intentions in moving so many weapons and for what purpose. It has been suggested that the arms were to be temporarily stored there whilst Captain James Kelly procured the intended weapons from Germany, under instruction from the Defence Minister, Jim Gibbons and the Army Director of Intelligence, Colonel Michael Hefferon. In 1970, O'Malley succeeded
Mícheál Ó Móráin as
Minister for Justice. At age 31, O'Malley was the youngest Minister for Justice since
Kevin O'Higgins who had presided over the tumultuous post-revolutionary period in Ireland in the 1920s following the Irish War of Independence and the
Irish Civil War. O’Malley knew that there was an informer because he mentions this fact in his memoirs – where he reveals that the Garda received a "tip-off" from an informer about the arms importation attempt that sparked the Arms Crisis of 1970. The informer was
Seán Mac Stíofáin, who did so to discredit the Jack Lynch government and prevent the development of a potential rival military organisation - the Citizens' Defence Committees. Mac Stíofáin had sourced superior weapons independently from the United States and wished to eliminate the possibility of these weapons falling into the hands of his arch rival,
Cathal Goulding, the leader of the Marxist rump faction, the
Official IRA, whom the media alleged the weapons were destined for. Curiously, in Taoiseach Jack Lynch's account given to
Dáil Éireann, in which no informer is mentioned and that the arms were discovered quite by accident by Dublin Airport Staff. As Minister for Justice, O'Malley reinforced the
Offences Against the State Act so that a person could be convicted of IRA membership on the word of a Garda Superintendent. He also introduced the
Special Criminal Court, a juryless court presided over by three judges which tries cases of terrorism and serious organised crime, with the cited raison d'être being to avoid
witness intimidation. O'Malley's plans to introduce internment without trial for
Provisional IRA suspects in the Republic were not implemented, but following an assassination threat by the IRA he was permitted to carry a handgun at all times and was frequently moved from house to house. O'Malley also introduced the Forcible Entry Bill, brought in to counter student agitation over the demolition of valued buildings. This move was bitterly despised by students in
University College Dublin, who pelted him with eggs during a meeting in retaliation. Journalists sympathetic to the
Official IRA and its political wing, Sinn Féin The Workers Party (from the 1982 as
Workers' Party), in both
The Irish Times and
RTÉ, such as Dick Walsh, Seán Cronin, Gerry Gregg and Eoghan Harris claimed that, despite being acquitted of wrongdoing,
Charles Haughey helped establish the
Provisional IRA through the illegal importation of arms and lionized Taoiseach Jack Lynch and Des O'Malley as the defenders of constitutional democracy, with the latter forming the Progressive Democrats, when in fact Lynch quite lawfully ordered the importation of the arms, very likely with O'Malley's knowledge and that of others. But given the poor relations between the British and Irish governments at the time, to admit such would have been incendiary.
Official IRA supporters in the media reviled the
Provisional IRA and laid the blame for the 1970 split at the door of Charles Haughey, whom they accused of importing the arms to foment that very split, as
Fianna Fáil feared a leftwing political competitor. Seán Mac Stíofáin's IRA rapidly eclipsed the 'Officials' (or,
Stickies, as they became known) in men and manpower and the
Official IRA declared a permanent ceasefire in 1972 (though continued to participate in feuding, murder and gangsterism for over a decade afterwards). Onwards into the 1980s and 1990s, other Irish Times luminaries, such as Fintan O'Toole, held to this myth as an explanation to the origin of the 1970 split, owing to a deep antipathy towards Charles Haughey personally and by contrast, Des O'Malley's stature as a paragon of virtue. But O'Malley's failure to act on intelligence concerning Seán Mac Stíofáin's activities would have exposed him as incompetent, in addition to untruthful concerning his knowledge of Jack Lynch's role in the importation of arms. Not until
Seán Mac Stíofáin's role as a (mis)informer was revealed did the political narrative changed. ==In opposition==