Former chairman of Irish Sweeps and Waterford Glass

Dr Paddy McGrath, who died on October 9th aged 74, was a senior member of a family which was prominent in the commercial life…

Dr Paddy McGrath, who died on October 9th aged 74, was a senior member of a family which was prominent in the commercial life of the State for most of the last century.

In particular, the family was pivotal in the establishment of the Irish Hospitals Sweepstakes - set up to fund Irish hospitals but also an important source of income for the family - and Waterford Glass. And, of course, the McGrath name is one of the best known in Irish racing circles.

Paddy McGrath was born in Dublin on February 12th, 1927. He had two brothers and three sisters. His father, Joe McGrath, was a former trade union official, 1916 veteran, member of the first Dβil, friend of Michael Collins and a Cabinet minister. His mother was Eileen Downes, whom he was later to recall with great affection.

He was educated at Sion Hill, Willow Park, Blackrock College and St Gerard's, Bray. By then, the wealth of the McGrath family was growing to the extent that at school it was a source of comment from other pupils.

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As a pupil, he found he had a great affinity for mathematics and, indeed, was to say he was useless at everything else. He saw mathematics as based on reason and thereafter, he said later, made reason the basis on which he made all decisions.

He left school at 16 and went to work at the Irish Glass Bottle Company in which the family had an interest. Thereafter, his own personal history was very much tied up with the businesses in which the family was involved, and especially with the Irish Hospitals Sweepstakes.

Joe McGrath and his associates Richard Duggan and Spencer Freeman had sold the Government the idea that an Irish Hospitals Sweepstakes could play a major role in funding the building of hospitals in Ireland. The Government agreed and legislation to regulate the company was introduced in 1933. The "Sweeps" laid the foundation of the wealth of the McGraths and others. The legislation allowed items such as "all other remunerations" to be deducted when calculating the amount raised by these sales.

Income from the Sweeps enabled Joe McGrath to buy land at the start of the second World War when farmland was worth little. When the war ended he was able to sell it at a profit and Paddy McGrath would later attribute the family wealth to this purchase of cheap land.

From its inception the Sweeps had questionable legal status. Overseas sales - some 90 per cent of the total - were effectively illegal, and the legislation governing the scheme appears to have been framed to mask the system of backhanders required to distribute tickets in the US and Canada.

In a 1978 RT╔ documentary, shelved at the time because of fears about job losses at the Sweeps company, Canadian police claimed that only about 30 per cent of ticket proceeds actually reached Ireland.

Paddy McGrath took over the scheme after his father's death in 1966 and chaired the Irish Hospitals Trust until 1987. The Sweeps enjoyed a wave of popularity for decades until it ran into two ultimately fatal problems. One was the postal strike of 1979 which cut off the post to Ireland and from which Paddy McGrath later said the Sweeps had never recovered. The other was the advent of state lotteries in these countries. The arrival of the National Lottery marked the end of the line for the Sweeps in Ireland

In 1932, the McGrath, Duggan and Freeman families had bought into Irish Glass Bottle in Ringsend, Dublin. This investment was to lead to the creation of another Irish institution, Waterford Glass.

The art of glass-blowing had been lost in Waterford but its revival began in 1947 when Irish Glass Bottle and the McGraths got involved in a project with others to start Waterford Glass. By the time of its official opening in 1950, the McGraths and Irish Glass Bottle each had a 50 per cent share in Waterford Glass.

Craftsmen were brought in from Belgium, Czechoslovakia and Italy to teach Irish apprentices. After a slow start it became one of the success stories of Irish business and at one time employed 3,500 people.

In 1984, Avenue Investments - a private investment vehicle for the McGrath, Duggan and Free man families - sold its 20 per cent stake in Waterford Glass for £17 million.

The 1980s and 1990s saw the sale of many of the company's assets. This has been attributed to two factors. One was the collapse of Avair and Waltham Electronics during a decade - the 1980s - blighted by recession, and general difficulties in doing business. The other was the desirability of providing relatively liquid assets to the by now extremely large number of shareholders from the McGrath, Duggan and Freeman families.

In 1988, Paddy McGrath was back in the news over a tax avoidance scheme. The scheme came to light after the Revenue Commissioners sought to outlaw a tax avoidance scheme used by Paddy McGrath and his brothers, Seamus and Joseph, who had made capital gains of more than £2.4 million on the sale of an estate. They engaged in what they admitted was a series of artificial transactions to create a £1 million loss which could be offset against these gains to reduce the capital gains tax liability. When the Revenue Commissioners refused to recognise the loss, the McGraths appealed and the matter ended up going all the way to the Supreme Court. The McGraths won.

Both in the business world (through auctioneers R. & J. Goff) and in his personal life, Paddy McGrath was deeply interested in horses and a regular visitor to the McGrath box at Leopardstown. The names of his brothers, Seamus and Joseph, were almost synonymous with racing in Ireland.

Paddy McGrath married Anna Burke, a physical education teacher, in 1950. Years later he was to describe her as his best friend. They had five children, Paul, Patrick, Neil, Jane and Roderick.

His family was more important to Paddy McGrath than anything else in his life. He had no problem about appointing family members to businesses in his control, once describing himself as "a practising nepotist".

He was also a practising Catholic and attended Mass on weekdays as well as Sundays. He was a director of the Catholic Herald and of the Irish Catholic and Catholic Press.

His other directorships included the Bank of Ireland, and the Investment Bank of Ireland. He was a member of Seanad ╔ireann from 1974 to 1978.

He was made a freeman of the city of Waterford, and among other honours he was a Knight Commander of the Order of St Gregory the Great and Patron of the Royal College of Surgeons in Ireland. He received a honorary doctorate from the National University of Ireland in 1984.

Paddy McGrath is survived by his wife Anna, five children, brother Seamus and sisters, Breide and Eileen.

Dr Patrick McGrath: born 1927; died, October 2001