Former Mass. Treasurer Cahill Pleads Not Guilty

Former Massachusetts Treasurer Timothy Cahill pleaded not guilty to charges of public corruption, fraud and conspiracy Wednesday in Suffolk Superior Court.

Cahill and two former aides allegedly used $1.5 million of taxpayer money for a TV advertising campaign for the Massachusetts State Lottery that prosecutors say was intended to bolster Cahill's failing 2010 campaign for governor. (The treasurer oversees the lottery.)

Cahill, who was released without bail on his own recognizance Wednesday, said he ran the ads to help the lottery. Outside the courthouse reading from a handwritten statement in a school notebook, Cahill said he knew the ads might look like they'd benefit him politically.

"I understood the risks associated with running the ads," he said. "As a candidate for governor, I could be criticized for running ads that were in the best interest of the lottery. However, I believed then, and I believe now, that the decision to run those ads was the right thing to do for the lottery."

Cahill says lottery sales fell in May and June of 2010 after the Republican Governors Association, or RGA, ran ads that attacked his integrity and management on many fronts, including the lottery. In one ad Cahill is called reckless. It reads: "At the lottery, Cahill’s office spending skyrocketed."

Cahill’s lawyer, E. Peter Parker, says the former treasurer wanted to respond to the RGA ads because cities and town rely on the proceeds.

"Top management at the lottery, top management at the treasury and senior management at the lottery all knew the RGA had gone for the jugular of the lottery and that a response was necessary, and that a defense had to be mounted," Parker said.

But the attorney general’s office has a different take on events.

It says Cahill ran the spots over the objections of senior lottery management. In court documents it also alleges that after Cahill learned from focus groups that his association with the lottery was a selling point, he contacted his campaign media consultant to use lottery funds to run ads.

The attorney general cites texts between Cahill’s media consultant and Cahill’s campaign manager that show the media consultant saying, “But Cahill can’t be in the ad. … But we run ads about the lottery being well-run and putting money back in the communities.”

A lottery staff member was allegedly then told to alter an old ad so as to boost Cahill. This is what was added to the ad: "That’s the result of a consistently well-managed lottery. And luck has nothing to do with it."

The attorney general also says Cahill called the ad agency directly, which resulted in an email from them that said: “The treasurer would like to run the ad as soon as possible through Nov. 4." That was two days after the election. When he came under pressure about the ads, he pulled them in mid-October.

Parker says campaign finance laws allow a candidate who is also an incumbent to use the public resources of his office to respond to criticism of his record.

"What Treasurer Cahill did was legal under the laws specifically directed at regulating campaign finance," Parker said. "What they attorney general is trying to do here is use for the first time ever a different criminal statute, a brand new criminal statute, to try to make criminal what has long been legal."

But Cahill is not being accused of violating campaign financial laws. He’s accused under a state ethics law that was changed in 2009 to make it criminal for officials to take “unwarranted privileges.”

If Cahill is found guilty he could face five years in prison and a $10,000 fine for each of the four charges. His trial is set for Sept. 24.

Cahill's former chief of staff, Scott Campbell, and the former lottery chief of staff, Alfred Grazioso, were also named in the indictments and pleaded not guilty Wednesday.

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