Aeons in the past, on a planet very near the centre of the galaxy, ancient automatic defence systems spontaneously activated themselves, and around the Capitol six hundred Time Lords simultaneously claimed to be possessed by the ghost of Morbius. In her office, the Lady President experienced an unexpected epileptic fit, during which she signed an order for three hundred prisoners to be released from a prison asteroid. Dragon tattoos snapped like flytraps on the arms of the convicts as they stepped out of stasis, and leading them was the ‘voodoo priest of the House of Lungbarrow’, the one they called Grandfather Paradox, who – according to popular fable – had only escaped execution because everyone was more afraid of him dead than alive. An embryo in one of the gene-looms began scratching the blueprints of a demat-gun into the semiotic fluid that surrounded it. Murder was etched across the face of the planet. The Eye of Harmony winked. - Christmas on a Rational Planet

The Grandfather never actually existed, and has now never actually existed for over two-hundred years. Although it's clear that somebody must have created the Faction, and although Grandfather is indeed the traditional title for the founder of a House, many outside the organisation are of the opinion that the Grandfather of House Paradox is, was and always will be nothing more than a myth. On the other hand, it's a maxim of the Faction that failing to exist is the best form of camouflage.

There are very few, even in the Parliament of the Eleven-Day Empire, who would claim to possess any real knowledge of their ancestor. All that remain are certain relics - the knife, for example, which was ostensibly used to remove the Grandfather's own arm in a legendary act of self-mutilation - but the provenance of these items is questionable. The name of the founder is rarely taken in vain by those members of the Faction who do exist, not because of religious veneration but because it's still considered possible that to speak the name too often might summon the Grandfather into being again- an inconvenience which the Grandfather probably wouldn't appreciate.