Apr 282011
 

Over the past year or so, I’ve been questioning the motivations of those who claimed to fight for “Irish freedom” a century ago.  It seems to me that we have made a complete hash of independence, and it also seems to me that the two parties who slugged it out in the civil war cared little for the ordinary citizen, but were more concerned with personal gain of power and money.

There were many crooks, many cynics, many con-artists, many opportunists, but if anyone exceeded the example of Joe McGrath, I have yet to hear of it.

There was no more spectacular instance of cynicism, dishonesty and avarice than this crook, a former torturer and strike-breaker, who used the war of independence as a springboard to defraud thousands of people around the world, and to drag the good name of Ireland through the mud.  After the civil war, McGrath’s Irish Hospital Sweeps became a vehicle for enriching him, his family and his cronies, to the extent that some of his fellow  Old IRA men in Ireland, Britain and the USA became obscenely rich.  McGrath himself acquired unimaginable wealth, and became one of the most powerful men in Ireland, capable of intimidating government ministers, including the famously irascible Des O Malley.

Showing an early propensity for dishonesty, McGrath orchestrated many bank robberies on behalf of the IRA during the war of independence, keeping a slice of the proceeds for himself.  During the civil war, he headed the CID, an intelligence unit responsible for torturing and assassinating political opponents.  Later, he was the principal adviser to Siemens-Schuckert, the company which constructed the Ardnacrusha hydro-electric scheme, and which was subsequently defaulted on by the Irish government. McGrath, as adviser, provided the gang of thugs who kept the workers docile as the project proceeded.

The Sweep, as it was popularly known, was a lottery, based on the winning horses in a selection of races.  All of my parents’ generation were fixated on the notion of winning the Sweep, a magic solution to all their problems.

The lottery was ostensibly set up to raise funds for Irish hospitals, but was in fact a private company designed to make Joe McGrath and his two bookie accomplices, Richard Duggan and Spencer Freeman,  very rich men indeed.

In their first lottery, the three crooks pocketed £46,000 — the equivalent of about €500,000 today, though these things are hard to measure.

Directors of the Sweepstakes were directors of many other Irish companies besides, and the dirty money went on to fund other sizeable Irish operations, including Waterford Crystal and the Glass Bottle Company, which was recently the subject of further controversy.  There seems to be no end to the tangle of questionable Irish business interests.

The underlying legislation permitting it was deliberately so full of holes that McGrath and his two cronies paid no tax on their earnings.  Furthermore, only about 10% of the money raised ever went to the hospitals, with the rest flowing into the pockets of the former freedom fighters in Ireland and across the world who operated the scam.  Despite this, McGrath somehow contrived to have nurses and Gardai drawing winning tickets from the drums, lending a spurious credibility to his fraud.

The motivating factor for those who bought tickets was the staggering size of the prizes, but even that was an illusion.  McGrath and his criminal associates set up a system to approach people who had bought potentially winning tickets, in order to buy them back at a fraction of the price.  In other words, they offered poor people cash in return for relinquishing their chance to win a fortune. The ticket was never cancelled, of course, and the McGrath operation duly collected the winnings when the horse romped home.

Freeman’s brother, Sidney, was in charge of a parallel operation to scam the system.   Based in his office in the Ritz Carlton Hotel, Freeman received details of the horses drawn in Dublin, sent to him by coded telegram.   Using this information, he contacted American winners and offered to buy a share in their tickets for a substantial amount.   In 1936, Sidney Freeman managed to acquire a half share in eight winning tickets, the profits of which were shared with the directors of the Sweeps.

The real genius lay in realising how desperate the Irish state was for money, much like today.  Even though only 10% of the profits went to hospitals, it was still more than the government could afford.  Therefore, any minister questioning the scam was vulnerable to pressure, as Des O Malley found out.  Whatever his failings, O Malley’s honesty has never been in question.  He was a fervent opponent of the Haughey tendency in Fianna Fáil, and in the Seventies, as Minister for Justice, asked for information about the funding of the Sweeps.  As Minister, he was responsible for signing an order approving every draw, and he wanted to know more about the money before he signed the next one.  The response was immediate pressure on government from members of the McGrath family.  Jobs would be lost in the Sweepstakes, O Malley was threatened.  Thousands of jobs.  Even if O Malley could contemplate it, his cabinet colleagues would not.

It was blackmail of an Irish government minister by a relative of a criminal.

Little did O Malley realise what was happening the thousands of Sweeps tickets.  Little did the  American authorities realise how they were helping the fraud by impounding ticket stubs as associates of McGrath attempted to smuggle them back to Ireland, or not, as the case may be.  Lotteries were illegal in the States, and therefore the US Customs had the authority to seize the Sweepstakes tickets bound for Ireland.   This they did, in their thousands, but of course, the money had already been collected in an operation run by fellow patriots, and was on its way back to McGrath, less the substantial slice due to the Stateside contacts — Joseph McGarrity, a former member of the IRB, and Connie Neenan, his fellow-IRA member.  Those in the know spoke of one plane so overloaded with sacks of money, it barely managed to take off from JFK

And the people who had paid for the tickets?  Simple.  The Feds took ’em.  Sorry.

Therefore, it made great sense to tip off the authorities about ticket stubs, which McGarrity duly did.  Every dollar ticket caught by the US authorities was a dollar in his pocket.

If you ever saw The Sting, you understand the scam.

A great Irish journalist, Joe MacAnthony (grandson of Francesco Marcantonio from Belfast), wrote an article in the Irish Independent, exposing the corruption at the heart of the Hospitals Sweepstakes.  As a result, all advertising on the paper was withdrawn for two months.  Some time after that, a planned RTÉ programme researched by Charlie Bird was scrapped after pressure was applied to the authority.

They haven’t gone way, you know.   You think Fianna Fáil held the power in this country?  Think again.

For his trouble, MacAnthony was frozen out of his job, first in the Independent and subsequently in RTÉ.    He moved to Canada, reared a family and continues to write stuff annoying the status quo.  Three years after arriving there, he wrote an exposé of the Canadian security service.  The difference between Ireland and Canada immediately became obvious, with the Canadian authorities launching an investigation, while the Sweeps continued to defraud credulous people all over the world, without interference from the Irish government.

A man with an irrepressible sense of fun, MacAnthony got his own back on the small-minded Sir Tony O Reilly and on McGrath by returning from a gambling trip to Atlantic City with a suitcase full of dollars and instructing his children to roll in the money, which they gleefully did.

McGrath, in the style of all Mob bosses, went on to become a leading racehorse owner, and left a vast fortune to his heirs.

A vast stolen fortune.

______________-

 

Following in Joe’s footsteps, Damian Corless has published a book called The Greatest Bleeding Heart Racket in the World.

Buy it and read it.

 

UPDATE: Where did the Sweeps Millions Go?

  49 Responses to “Joe McGrath and the Irish Hospitals Sweepstakes Fraud”

Comments (45) Pingbacks (4)
  1.  

    Fascinating reading Bock. As always.

    I can remember as a smallie watching the draw on T.V with my grandparents. I never knew that it was a complete and utter scam.

  2.  

    Indeed, Robert. It was all a scam. The whole lot, right from the start.

  3.  

    Great writing there again Bock..
    You couldn’t make this stuff up.
    I have a hard time understanding how some people can be so corrupt.
    I was thinking after reading the ‘Disconnection from the State’ thread, that the analysis of the personality of the likes of Brian Lenihan is spot on – narcissistic, with a arrogant sense of entitlement.

    There’s a lack of empathy also. This may be apportioning too much leniency to them, but I also think it’s a lack of awareness of the people who are suffering because of the corruption. The tax payer being a non entity to them, rather than real people struggling to make ends meet.
    I suppose it’s just ignorance really.

    It’s a disgrace that there’s no protection for whistle blowers in this country.
    One other point. If the fortune of Joe McGrath and his cohorts has been shown to have been accumulated illegally , why hasn’t it been taken off them and given back to the state?
    Same question applies to the Haughey family.

  4.  

    Does the general public know at this moment what salaries are paid to administrators of the National Lottery? Does the Lottery ever issue statements about the proportion of money spent on advertising, the proportion paid out in prizes, the proportion paid as grants to worthy social causes (some of which are well publicised) and the proportion of profits which is invested? Has the Dail ever held committee hearings on the operation of the National Lottery and the social effects? If we are going to lament what Joe McGrath and cronies were able to do decades ago because of no government attempt at statutory accountability, we might as well look to our corresponding contemporary situation and see what checks and balances are in place to prevent history repeating itself in a different context.

  5.  

    The sweepstakes drum still exists. It’s lying forlornly beside Cabinteely house in Dublin.

  6.  

    Benno — With any luck, you’re going to reveal all this information. Yes?

  7.  

    Too close to home in parts for me to comment, fascinating stuff though.

  8.  

    excellent piece

  9.  

    @6 Bock. Alas no, I have no shock revelations. Some digger of Joe MacAnthony’s calibre might be curious enough and assiduous enough to start excavations.

    Another area of populist expenditure is the charity sector. The Irish are regarded as a soft touch when it comes to putting hands into pockets and purses, whether it be earthquake and famine relief, raising funds to send hole-in-heart babies to America for expensive operations, or for research into cancer and Aids. Many British charities have moved into Ireland in past decades in response to rumours about our soft touch. One dubious charity has been the house-to-house collection of old clothes for poverty alleviation in Africa. Attempts to get further info on one of these charities by dialling a phone number on leaflets dropped through letter boxes were fruitless.

    By all means publicise the historical scandal of the Hospitals Sweepstakes, and how Joe MacAnthony’s efforts to expose it were thwarted; but be aware that Irish popular gullibility persists into the present and can easily be exploited.

  10.  

    It’s called the status quo.
    I thought you’d know that!
    Isn’t it a great little country after all?

  11.  

    Bock, I seem to remember that Noel Browne raided the fund in the 1950s when he was setting up the sanitoria which ultimately eradicated TB.

  12.  

    He used the 10% that McGrath and his accomplices didn’t steal.

  13.  

    Given Noel Browne’s track record, just think of the Health Service he could have created if he had got it all.

  14.  

    Exactly. Great strides were made with the dregs of money that McGrath had to hand over to maintain the pretence of a charity. Imagine if it had all gone to build hospitals, as it was supposed to.

  15.  

    Excellent post.

  16.  

    Excellent post Bock!

  17.  

    Hey girl! The truth always reads well.

  18.  

    I was at a yard sale the other day in LANDAFF, NEW HAMSHIRE..USA and picked up a picture, when i took it apart to clean, A Irish Hospitals Sweepstake Ticket fell out of it, Dated Sept. 26th, 1959… Ticket # ECQ47639,,,just wondering, do you think its a winner or know who might know… Thanks Thomas

  19.  

    Oh definitely. Probably ten million dollars.

  20.  

    LOL

  21.  

    Ah sure you only forgot to mention how Mc Grath helped defuse the Army mutiny in 1924 & how he resigned as a member of Fine Gael (which would have been better for him to stay) over the way ex IRA men where treated who served in the Army & risked there life`s for years for the freedom of this country. Then where thrown on the scrap heap in favour of ex British officers & Officers who had better connections then them. Also in the 1930`s McGrath gave work to ex IRA men who fought in the War of Independence no matter what side they took in the Civil War in a period when men who fought in 1916 where dying in poor houses . Also the bottle glass company & Waterford glass again a lot of jobs to a third world country !.Where did you get your research for this ? without reading it I would guess its from the book that came out a few years ago about the sweep ? If they only gave 10% of the money from the sweep to Irish hospitals, well that would have been millions & would have saved 1000`s of lifes !!! at least try & show some balance instead of having a go at someone who is dead a long time.

  22.  

    You didn’t read it? Well then go away.

  23.  

    No I did not read it. But I unlike you I did some research that went past one book & wikipedia . Maybe you should research Spencer Freeman ? he was such a gangster he left the Sweep during the second World War & went re enlisted & helped the war efford, really the acts of a money grabber ? your little rant , does have one effect as most historians & people who are interested in history know, it causes people not to share information. I know for a fact a couple of years ago a family where handing in a huge amount of papers to one of public archives.A tv program made negative comments about a member of that family & now a huge source of information on the Civil War is lying in an attic. Keep up the good good work sure you might be famous some day !

  24.  

    If you are aware of anything factually incorrect in this post, please point it out.

  25.  

    Last comment “Censored ” nice bit of free speech, If you cant win the argument, then delete it ?, what next burn a few books ? I was only pointing out the positives, but sure you don`t want to hear them, I gave you information on Spencer Freeman showing he was not just driven by money. Your little trip down histories lane would not bother me only when I googled something about the sweep this was the top result. History has been told for years in this country in an unfair way with a lot of people being written out, Now we have the blogger who knows everything yet knows nothing to highlight the negative ! God Love us !

  26.  

    None of your comments were censored.

    Let me explain censorship to you. When somebody prevents you expressing your views, it’s censorship. I can’t prevent you from doing that, and I wouldn’t want to do so. You are perfectly free to set up a website and say whatever you want without interference from this site, but you have no right to get a single word published here. Despite that, everything you posted so far was published.

    This is about the Sweepstakes scam. If you have something to say about that, you’ll be welcome, but if you try to derail the discussion, your efforts will not be entertained.

    Do you have something to say about the Sweepstakes scam? And do you have an answer to the question you were asked?

    Don’t for even a second think that I came down in the last shower.

  27.  

    The whole article is a joke, its a review by someone with an axe to grind, who does seem to have any knowledge on the subject except what you read in one book ?. I guess your not from Dublin & have never spoken to people of an older generation about the good the sweep did ? or that Joe did .

    I will answer your question just picking one part of the above.

    Ok I have to go, so can not go into much detail, but Freemans brother buying back tickets ? how was that a scam .say a pound ticket was picked, it may have a 20/1 odd of getting say 100k prize ., It was bought for something like 8k for a 75 % share so if it won a minor prize Freemans brother lost money !

    Also my last comment for some reason only showed up 2 mins ago , hence I was thinking I was censored ! History is a great thing I only ask for you to research & show a balanced view ! The funny thing is you might be surprised & shocked if you really research the sweep ; )

    Thank you for letting me have my say ! the last shower lol very good,

    and “I did not come down the liffey on a donut “

  28.  

    You were asked a question. Is anything in this post factually incorrect? If so, please point it out.

  29.  

    Factually incorrect,

    Ok Joe Mc Grath ” A former torturer , if so who did he torture ? then you change it to he headed CID ? you also call him a crook ? what evidence do you have for any of that ? , I am sure you will say the fountain of all knowledge your book ? If Mc Graths family decided to sue your ass off for what you wrote above & you went to court whats your defence ?”I read it in a book so it must be true !”

    Spencer Freeman a bookie ????, he was an Engineer , who started his working life in american car plants.

    Also you mislead the buying back of tickets or your book does, in fact as I said above the price paid for percentages was quite generous & as far as I can remember it was UK Bookies that started doing that, the famous case was Emilo Scalla I think.

    As for my censorship comment, my post was not appearing ! so I think I had a right to think I was censored.

    Also you don`t seem to be able to argue about anything I have posted , except for is it factual , which leads me to believe , you know nothing about the subject except for that book you read ? which I find funny as its author also writes comedy !

    Anyway my main argument was your article is one sided & badly researched. But I suppose it will be fried egg`s or windmills or something else that you will be an expert on .

  30.  

    There’s no reason to argue with anything you posted since most of it has nothing at all to do with the Sweepstakes scam. You were just trying to change the subject.

    Joe McGrath was a thief and a swindler who made a fortune from a giant fraud.

    Everything else is irrelevant.

  31.  

    Ok , you answered my question, you know nothing really about the sweep, the glass company and the effect it had on normal peoples lives & providing jobs.If it was a swindle ? it put a lot of cash into Ireland, have you ever spoken to a working class person who lived in the 1930`s in Ireland ? I guess not.

    Irrelevant, that sums up the whole page .

  32.  

    When I write something about the Glass Bottle Company, you’ll be the first to know.

    This post is about the Sweepstakes.

  33.  

    You mentioned the Glass Bottle Company in the article ! when you write a decent balanced article please let me know ! : )

    Anyway have a nice life & all that !

  34.  

    I agree with gary d You are just using this blog to rant and hate monger agenst the mc grath family and It is unfair to use words like thief and swindler you obviously have some deep seeded history with your family and the mcgraths but warping the truth isnt a proper way to retell the history of an institution which may have been flawed did help the hospital system in Ireland. Joe mc grath may have been an opertunist but the good that was done outwieghs the ill. for you to rant as such is low and you have sparse evidence as very little until now has been written apart from two books which indeed well written can be fanciful in places. i am not writing to spark an argument i am writing as an informed individual who knew individuals in the sweep.

  35.  

    Joe McGrath was a thief and a swindler. Most of the Sweeps money went into his back pocket, and if you’re comfortable with that I pity you.

  36.  

    This is a load of RUBBISH and Gary D and Ronan J are right when they say that you have no basis or proof regarding what you are writing and I would STRONGLY suggest that you remove this slanderous rant from public viewing.

    You have absolutely NO CLUE or you wouldn’t be denigrating someone who has helped so many.

  37.  

    Gary D, Ronan J, Fiona M: did Mcgrath make more moneys off the sweeps than he put back into the economy

    If so, is it not dishonest to claim that the sweeps were set up for the good of the country

  38.  

    Where have comments 38 to 40 gone?

  39.  

    That’s a very good question. What did they say?

  40.  

    No idea! The history of the Sweepstakes Fiasco has fascinated me. It is very much wrapped up in the old IRB and a whiff of cordite. The comments from the “snakin’ regarders” on this blog are endemic of the attitude that has left this country in the state it’s in. “Sure he did great good, wasn’t 10% enough etc..”. There’s a lot more dirt about Mc Grath than just Wikipedia and Damian Corless’s book

    Dr. Marie Coleman
    http://www.turtlebunbury.com/published/published_reviews/pub_rev_sweep.htm

    The Irish Hospitals Sweepstakes kept alive a “sprawling patchwork of local hospitals unnecessary to service a population of four million people” — a legacy that still resonates today. Prof. Mary Daly http://historyhub.ie/the-curse-of-the-irish-hospitals-sweepstake

    The original article ‘73.
    http://www.independent.ie/unsorted/features/how-i-exposed-the-sweepstakes-scandals-25917571.html
    Apart from Joe losing his job, the Independent owners were so affected by the advertising revenue loss that they had to sell the paper, to our dear Dr.Sir.A.J.F. O’Reilly PHd . And we know how that fared out, Sindo et al…

    Don’t forget the thousands of staff who ended up with a pittance of a pension when it folded in the 80’s.

    The money skimmed off was massive. Using the measuring worth calculator
    http://www.measuringworth.com/ppoweruk/# that 1920’s £46k lottery you mention is worth over £7m in earning power today. I did a rough calculation once that worked out that Joe Mc Grath made c.€3 billion in today’s terms, over a period of 30 years. And this was in CASH, not stocks or shares…

  41.  

    I just wanted to know if someone has a ticket from the irish hospitals sweepstakes it is no good.

  42.  

    My grandfather was a friend of joe mcgraths. Dublin was a very small place back in the 20’s 30’s and 40’s. Joe started work as a clerk in B+I. My father often referred to him as a gunslinger. As often happened post revoloution worldwide, people profiteered. Joe was one of them and probably came up with one of the best scams ever. But he wasn’t the only one, not that this fact justifies it. Plenty of rebels families ended up with nice farms and such bought with the proceeds of bank robberies. The Provos weren’t original in robbing the northern bank to pay off their dogs of war.
    Getting back to the mcgraths, I met young joe, as he was called. He was the most obnoxious arrogant man I ever met and tried his best to make a 14 year old boy feel small. My father and uncles reckoned he was spoiled and in dulged. He used to be some kind of an officer in the LDF which was a forerunner to the fca and loved to don the uniform at the rds horse show. The family had the best farms in the country. But with all they had I’m not sure they had real happiness. Young joe was treated for an eating disorder. Their wealth went like snow on a ditch. So I suppose that’s karma

  43.  

    Joe McGrath was used by the government in the mid 1920s to thwart unionisation among the unskilled Irish workers involved in the construction of the Shannon hydro-electric dam at Ardnacrusha. Things got physical at some stage and the workers were rendered docile. Irish labourers complained among themselves that skilled Germans imported by the Siemens AG company that planned and directed the great project were treated humanely by contrast.

    We need an intrepid journalist to write a warts-and-all biography of the redoubtable Joe and his links with Cumann na NGael initially and subsequently with Fianna Fail top leaders and inter-party leaders in the 1950s. Such a biography would tell us a lot of things that don’t get touched upon in school history textbooks.

  44.  

    I have an Irish Hospitals’s sweepstake ticket Cambridgeshire closing date sept. 1967 TZE96447 is number on the ticket, winner or fraud? found in my deceased father’s things

  45.  

    Good luck with collecting that.

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