British intelligence services suspected that profits from the Irish Hospitals' Sweepstake, a lottery set up in 1930, were channelled to the IRA, according to files released last week.
MI5 used postal intercepts to track the sale of tickets by what they regarded as IRA supporters living in the UK. The intelligence service suspected that cash raised from sweepstake tickets was being used to arm the paramilitary group, according to the security files released at the National Archives.
Among those targeted was Dr Moira Connolly, a daughter of James Connolly, one of the executed leaders of the 1916 Rising, who was living in London. While the sale of tickets for the Irish sweepstake was illegal in Britain, there was a black market and Connolly was among those acting as an unofficial sales agent.
MI5 discovered the link during an investigation of Connolly's husband, Richard Clyde Beech, a committed communist and Soviet sympathiser. "Richard Clyde Beech and his wife are reported by the GPO [in Dublin] to be much interested in Irish sweepstake tickets," one intelligence report said.
The Metropolitan police's Special Branch also told MI5 that Connolly was the trustee of a fund for communists and IRA members on the run from Ireland. Another trustee was said to be Tomas O'Sullivan. The file says: "Any communist who is on the run from Ireland must prove his bona fides to Dr Connolly, while IRA members must be able to satisfy Tomas O'Sullivan of their genuineness by producing a letter from their [commanding officer]."
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MI5 suspected that because of her links to republicans, Connolly might be giving some of the proceeds from the sale of sweepstake tickets to the IRA. However, it never established whether this was the case.
The sweepstake was set up in 1930 by Joseph McGrath, a former member of the IRA and Sinn Fein minister in the first Irish government; Richard Duggan, a Dublin bookmaker; and Spencer Freeman, a former British army officer. All three became hugely wealthy as a result of the lottery's success because, while it raised money for Irish hospitals, it was run as a private, for-profit company.
The majority of the tickets for the draw were sold abroad illegally, with up to three-quarters being bought in Britain. Lotteries were illegal in most other countries at the time. American authorities at ports regularly confiscated ticket stubs destined for Ireland.
Prizes reached 350,000 - about 30m today. The winners were decided by the outcome of several horse races, including the Epsom Derby and the Grand National.
The tickets became so popular in Britain that its government passed the Betting and Lotteries Act 1934 to prevent the export and import of lottery-related materials. British ministers disliked millions of pounds leaving the country. The files give no indication whether a suspected IRA link influenced the decision.
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According to the intelligence files, Connolly's husband worked in London for Russian Oil Products, which also had an office in Dublin. It sold Russian oil products abroad, and was believed to be a front for Soviet intelligence. Beech also ran the London operation of the Progressive Bookshop, which shared an office with Tass, the Soviet news agency.
MI5 discovered that Beech was receiving sweepstake tickets from the Dublin branch of the bookshop.
"Beech has had connections with the Soviet espionage organisation here. In 1925 he married a daughter of the late James Connolly and has since been in touch with Irish extremists in London. He is secretary of the James Connolly Club," said the file.
Surveillance on the couple was reduced during the second world war, but in the 1940s the file notes that Beech had got a job as editor of a chemical workers' union newspaper.
It is estimated that the sweepstake raised IR£133m (169m) for the Irish health service between 1930 and 1987. Some IR£247m was handed out in prize money.
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A TV documentary in 2003 revealed that Irish authorities had turned a blind eye to backhanders and the smuggling of tickets because of the wealth generated for the country.
The sweepstake remained popular until the 1950s, but support gradually dwindled as it was beset by a series of scandals and it emerged that the organisers had made huge fortunes. The legalisation of gambling around the globe and the foundation of the National Lottery spelt the end.
The sweepstake company bid unsuccessfully for a licence to run the lottery, but the contract was won by An Post. The last sweepstake draw was held in 1987.