He later came to prominence as a lobbyist and publicist for the tobacco industry.
O'Mahony had himself stood unsuccessfully as a Labour candidate at the 1969 and 1973 general election in the Dun Laoghaire-Rathdown constituency. He stood in Dublin North Central at the November 1982 and 1987 general elections, and in Dún Laoghaire at the 1989 general election, but never won a seat in Dáil Éireann.
However, in 1981 he was elected on the Administrative Panel to the 15th Seanad, and was re-elected twice, serving until the dissolution of the 17th Seanad in 1987. In March 1983 he was appointed as a Member of the European Parliament, filling the vacancy caused by the resignation of John Horgan. However, he did not contest the 1984 European election, in which Labour lost as the for seats in the European Parliament which it had won in the 1979 election.
O'Mahony, later became known as the "public face" of the Irish Tobacco Manufacturers Advisory Committee (ITMAC), of which he was director and which shared an office in Dublin with O'Mahony's company CIPA, and in 1992 O'Mahony's name was recorded as the donor of IR3,000 donated to the Progressive Democrats on behalf of ITMAC. As a lobbyist in the against plans for legislation to protect workers against passive smoking, O'Mahony was named in 1999 as having been involved in lobying by ITMAC which Dr Fenton Howell, vice-president of the Irish Medical Organisation, claimed "secretly manipulated and misled a group advising the minister for health on new smoking regulations". O'Mahony subsequently told the Joint Oireachtas Committee on Health and Children that he could not remember who gave him information about a meeting of a Department of Health working group which had allowed him to circulate a report of the meeting to tobacco companies within 24 hours of the meeting. After hearing O'Mahony's evidence, the chairman (deputy Batt O'Keeffe told Mahony that some of the points made about about his conduct were "well-founded", and recommended that "in future deliberations he would be conscious of the public interest and people's health". In 2001, Howell told a sub-committee that O'Mahony had been "less than candid in his replies" to the committee.
O'Mahony was one of three former senior officials of the Irish Labour Party reported to have had ties with the tobacco industry.