How I exposed the Sweepstakes scandals
Published 06/12/2003 | 00:11
This week an RTE documentary looked back at the extraordinary world of the Irish Sweepstakes. Thirty years ago, the Sunday Independent published an explosive 8,000-word story on the shadowy people involved in the Sweepstakes and the millions it made for them. Here the reporter, JOE MacANTHONY, tells how his story came to be written - and what the consequences were
One winter's morning in late 1971 I sat discussing possible stories with my editor Conor O'Brien at the Sunday Independent. It must have been a slow week. He suggested that I do a story on the Sweep.
The Irish Hospitals Sweepstakes was still the face of Ireland around the globe then, selling tens of millions of tickets annually from New York to New Delhi and in any fool's paradise on the way. But in Ireland the Sweep was dead in the water. Every few months they put on the same jaded hoopla, with young nurses, glumfaced Garda superintendents and dredged up human interest releases of the 'Tiger swallows consolation winner' variety. There was nothing I could see to warrant a substantial story. But Conor insisted that I look.
The first trawl of the archives yielded nothing. That was a puzzle in itself. How could Joe McGrath, a man of humble origins who raised money for charity, end up as the richest man in Ireland and not have a single article written about him other than a minor obituary when he cashed in his chips? Where in heavens was the begrudgery that is part of our nature when we witness anyone piling up the loot? And why had no one ever published an article describing the inner workings of the Sweep?
I had never seen a sheet this clean in investigative research. Either these people - who were running the largest sustained smuggling racket in human history, mind - were snow pure. Or the rest of us were Simple Simons. Since neither was acceptable, I started over.
But this time I began at the very beginning, with the Dail debates of 1922. Barely a few pages in and suddenly there it was: people speaking openly and critically about the infant scheme and revealingly, if somewhat maliciously, about the type of people involved. Here was the business. I slogged through the debates up to 1971, extracting every relevant scrap.
That evening, I began to make journalistic arrangements for smuggling out the Sweep accounts, restricted to Dail Deputies, out of their Library piecemeal for copying. From that point on, I began interviewing sources, culling from books, roaming through microfilm, looking for anything and anyone that might help advance the story. Towards the end, I travelled to the United States and Canada to comb newspaper libraries, archives and to interview various categories of investigators.
The weeks had stretched to months. But I was finally ready to go.
The article I turned over to Conor O'Brien was a monster, almost 8,000 words long. He wiped his brow when he read it and said: "Jesus, you better be right" then sent me off to have it examined by the Indo's legal eagle. While doing research for the book I'm now writing on the subject, I talked to the man who did the vetting. When I recalled that meeting, he laughed and said: "When I asked for your proof, you lugged in a suitcase."
He did a fine job by my lights, going through line by line, challenging, but without finding it necessary to make any substantive changes.
No one knew better than Conor O'Brien the risks involved in publishing that article. Not only were we going head to head with the most powerful financial interests in the country. Those very same people were close friends of the Murphy family, who owned Independent Newspapers.
Normally space considerations would demand that an article of that magnitude be split in two and published on consecutive weeks. But if that happened, we knew that the second half would be unlikely to hit the streets.
So Conor made what was to be a momentous decision. He would not inform the Board or the Murphy family of what he was doing. The complete article would run in one edition.
It ran full and uncut on January 21, 1973. Entitled 'Where the Sweeps Millions Go' the opening summation best describes the somewhat explosive contents.
Following months of investigation into the Irish Sweepstakes, it can now be established that Irish hospitals are receiving less than 10% of the value of tickets marketed in their name throughout the world by Hospitals Trust (1940) Ltd.
From interviews with the US Postal Department and with police across Canada - where most of the tickets are sold - it seems clear that more than 90% of the value of tickets entered in each draw is being written off, mainly to expenses, at a rate of more than £150,000 a week.
Our investigations show also that the persons legally responsible for managing and controlling the Sweepstakes - The Associated Hospitals Committee - are not fully aware of the true figures involved in the operation of the Sweep.
Nor are Dail deputies - even though it is Dail Eireann which provides the authority by which the Sweepstakes are run.
These disclosures are only part of what must be one of the most extraordinary, yet least publicised, stories in modern Irish history.
For the facts show:
* that the Act which licenses the Sweep was so framed as to prevent the Irish public knowing the real amount of money spent in running the scheme.
* that the figures published by Hospitals Trust (1940) Ltd after each sweepstake are considerably less than the true amount involved.
* that the hospitals receive only 75% of the sum described as the Hospital Fund - because the only tax on the Sweep is taken from the hospitals not the organisers.
* that agents of Hospitals Trust Ltd. are engaged in selling tickets abroad at prices far above those sanctioned by the Minister for Justice.
* that leading shareholders in Hospitals Trust Ltd. have also been involved with a bookmaking group in buying up ticket shares which allows them to win their own prizes.
It is also true that, while the leading family involved in the Sweep, the McGraths, are increasing their wealth at a rate of £8,000 per day, most of those who have retired after giving 25 years service to Hospitals Trust Ltd. are receiving a pension of less than £4 a week.
We had been expecting a storm when the paper left the building. What we got was a Force 10+. In the words of the poet Archibald Macleish - Quite unexpectedly, the top blew off.
Amid the chaos something professionally galling happened. Information started coming in which showed that the article was actually letting the promoters off easy.
This was not a story of Celtic rogues going on the rampage. There was a far more dubious reality behind that image. There was no 'made in Ireland' label on The Irish Hospitals Sweepstakes. It was, in fact, the creation of two English bookies, Sidney Freeman and Martin Henry Benson, both of whom in the parlance of our day, were 'well known to the police'. It was done with assistance from an Irish colleague, Richard Duggan, who enjoyed similar recognition from the lads in blue on this side of the water.
The embryonic partnership grew out of a sweepstakes Duggan ran for the families of victims in the 1918 sinking of the MV Leinster. It was Freeman and Benson who mailed his tickets to their massive address list of potential customers in Britain for a cut of 10pc of the take.
In 1922, as independence dawned in Ireland, all three saw the fledgling Irish Free State as a safe haven from which to market tickets in Britain where lotteries were illegal and the demand was enormous. The benefits were obvious. A licence in Ireland would give a lottery much prized legitimacy in a field brimming with crooked competitors. It would also do away with unwelcome seizures of incoming cash, a major hazard in the British lottery business.
While bitter experience had taught the two Englishmen to keep figures in their heads and their money out of sight, they were fortunate that Richard Duggan declined to adopt the same course. A distinguished looking rascal, he felt secure in continuing with the more respectable double book keeping. He was convinced that the up-market clientele he cultivated would protect him from harm. One of those clients was Joe McGrath, a Free State Minister and Micheal Collins confidant. No one can say what arrangement was made but McGrath came on board in 1922 as the group's backstairs persuader.
The job was not without its difficulties. McGrath's most trenchant opponent, unfortunately, was Kevin O'Higgins, the Minister actually responsible for licensing. Outspoken, eloquent, a dubious friend and an intractable enemy, O'Higgins hated sweepstakes promoters with a passion. He had already stymied McGrath's first efforts at getting a licence, despite the support of his boss, President William T. Cosgrave, and he had come down on Richard Duggan like a ton of bricks.
In 1924, in a clash over an attempted army mutiny by friends of McGrath, O'Higgins virtually took over the Government with Cosgrave absent, jailed the mutineers and brought a Ministerial reshuffle and McGrath's resignation. Despite Cosgrave being head of Government, O'Higgins's decisivesness led to his emergence as the Government's strongman. From that position, he made it clear that there would be no more sweepstakes licences so long as he was around. Even Cosgrave was silenced.
For three years, McGrath languished in the wilderness, borrowing a little money from the Government's secret fund, doing a little strike-breaking on the Shannon Scheme, essentially going nowhere.
Then, in July 1927, in one of those extraordinary coincidences where one man's tragedy proves to be another's good fortune, Kevin O'Higgins, coming home from Mass without his usual escort, was accosted by three men and shot down. Whatever about the tragic consequence, there was no question that McGrath's star was back and rising. With Cosgrave's backing, and sustained canvassing, he finally got that coveted sweepstake licence for himself and his backers.
In 1930, Joe McGrath, Richard Duggan and with Sidney Freeman's brother Spenser to look after the interest of both English lads, their Irish Hospitals Sweepstakes ran its first sweep. The boys not only had official Government backing - Cosgrave even had the Garda Commissioner supervise the draw. To lottery addicts, here was the only official and honest sweepstake in the western world. With its newly-created pristine image, a £350,000 first prize (worth around ?20 million today), the Irish Sweepstakes captured the attention of the world and became the most famous and richest lottery on the globe.
What the Sweeps article exposed was what use the partners made of their newfound good fortune. It did not make pleasant reading, especially for the promoters. What it did do, and do so irretrievably, was to draw back the carefully constructed curtain that hid the promoters underhand activities from the public.
A lot of praise has emerged this week for the article and for me by extension. While I am grateful and happy to hear it, I have to say that the real hero of this story is not me, but Conor O'Brien. The publication and the impact of the story owes more to his courage than anything I did.
In making the decision to publish as he did, he was saying without words that a piece of journalism and the public interest it would serve by publishing was more important than whatever responsibility he owed to the people who employed him. Conor was, in effect, committing career suicide with that decision. And so it proved.
There are some things you only learn by living a long time. It took that time for me to understand the full significance of what he did that day. But by the time I did, he had died and I had lost the opportunity I had to thank him for it.
The Sweeps story had no happy ending. At our last meeting, the writing was on the wall for both of us. I had lost my merit pay in restructuring and management showed no desire to restore it. My regular six-month contract with RTE was cut, not to be renewed. With a Ray Burke exposé about to be published, I wanted to stay and fight. But the prospects were grim. Investigative journalism might have been dying at the Independent but it hadn't even taken root elsewhere. I asked, but no one would hire me.
All I had on offer was a six-month contract from the Canadian Broadcasting Corporation. It was risky business taking my wife and four children to Canada with only that to sustain us. If anything went wrong we would be stranded in a strange society where we didn't want to be in the first place.
With that responsibility straining me, I went back to Conor with a measure of desperation and said: "Give me two pounds above the rate and I'll stay." The sum was paltry - but approval would have given a measure of hope, some faint reason to stick it out. He looked at me and I remember the way he shook his head.
He said: "I think it would be better for you, Joe, if you left."
He knew, better than I did, that the good times were over. But I was angry at what was happening to me. I left and to my deep regret, I never spoke to him again. He was a brave and honourable man. I hope this helps for others to honour him as well.