On February 18, 2007, he stepped down as a result of the controversy surrounding his involvement with Anna Nicole Smith. On May 2, 2007 he was re-elected to his seat in Parliament, but as an opposition member because his party lost the general election to the Free National Movement. In April 2020, in a lawsuit against Peter Nygård it was alleged that Nygård "gifted" Smith to Gibson.
On May 2, 2002, D. Shane Gibson was elected to the Parliament of The Bahamas,  as a member of the then ruling Progressive Liberal Party. On May 10, 2002, he was appointed by the then Prime Minister Perry Christie to the Cabinet as the Minister of Housing and National Insurance. Gibson was appointed to the post for which he would become most well-known internationally, as the Minister of Immigration, Labour and Training when Christie reshuffled the Cabinet on February 22, 2005.