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Timothy Cahill’s defense undercut by record

Lottery sales did not dip before he ran ads

Wendy Maeda/Globe Staff

Former state treasurer Timothy P. Cahill as he left Suffolk Superior Court in Boston on Wednesday. He is charged with misusing state lottery advertising to bolster his election bid.

Former state treasurer Timothy P. Cahill’s primary defense against charges that he illegally used state funds to bolster his candidacy for governor rests on his contention that he launched a $1.5 million Lottery ad campaign only because a blitz of Republican attacks had damaged the agency’s sales, a vital source of funding for cities and towns.

But Cahill never relied on such a belief during his 2010 campaign, according to a review of his statements and interviews from that period. To the contrary, he repeatedly stressed that the GOP attack ads — a $2 million onslaught paid for by the Republican Governors Association that spring — had no effect and that Lottery sales had remained strong.

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In October 2010, when Cahill, under pressure from Attorney General Martha Coakley, pulled the state taxpayer-funded ads off the air, he shied away from citing the GOP attacks on his management of the Lottery as the reason he ordered the agency to mount a major promotional campaign in the final stretch of the gubernatorial race.

Instead, Cahill boasted that Lottery sales were robust and generating revenues above the previous year. And indeed they were. Lottery sales figures during that period show no serious decline or major volatility in revenues. In July 2010, when Cahill decided to fund the promotional ads, the agency saw an 18.5 percent spike in revenues from the previous July.

The claim that the Republican ads had a negative impact became central to his defense only when his lawyers became involved after the election and he faced a criminal investigation.

Cahill declined to comment on the shift, but his lawyer, E. Peter Parker, cited the GOP defense when he responded Tuesday to the indictment charging that Cahill’s campaign aides orchestrated the Lottery ads with the candidate’s approval and direct involvement.

Parker said Cahill would have been derelict in his duties if, as chairman of the Lottery Commission, he had not ordered an agency response to the Republican Governors Association’s media campaign. The GOP had targeted Cahill, hoping to tarnish his image because his independent candidacy was threatening Republican Charles D. Baker’s challenge to Governor Deval L. Patrick.

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Cahill was arraigned last week in Suffolk Superior Court.

But the former treasurer offered quite a different account of the impetus for the Lottery ad campaign during his gubernatorial campaign.

In early October 2010, when WRKO radio talk show host Charley Manning asked Cahill whether the GOP attacks had hurt Lottery sales and the agency needed to respond, Cahill brushed off the suggestion, noting that Lottery revenues had run $89 million above projections for the fiscal year that ended July 1.

‘‘So whatever they did did not seem to work for the last half of the fiscal year,’’ he told Manning, referring to the attack ads that aired several months before Cahill’s Lottery blitz launched in September.

Two days after the WRKO interview, at a Greater Boston Chamber of Commerce campaign forum, Cahill was again adamant that the Lottery sales were more robust than the year before.

‘‘Our sales were $4 million over last year’s sales this past week, and $6 million week after week,’’ he told the crowd.

Overall, figures from the agency show that the daily average sales from July through October 2010 totaled $11.8 million. For the same period in 2009, the average daily sales were just slightly higher, at $11.9 million.

The only time Lottery revenues dipped precipitously was in October 2010, long after the GOP ad campaign had ceased.

In the final weeks of the campaign, Cahill also defended the publicly funded ads by emphasizing that they were no different than similar spots in yearspast.

The Lottery was ‘‘doing what the Lottery does. . .. advertising is something we do every year. It’s virtually the same ad,’’ Cahill said in a separate WRKO radio interview on the morning of October 8, 2010.

But as it became clear that Cahill could face serious criminal charges over the ad campaign, his defense shifted, focusing specifically on the negative revenue impact of the Republican attacks.

Parker said Thursday that he is not familiar with all the public comments Cahill made during the campaign, but he expressed confidence that he can prove that the discussions at the Lottery about the promotional ads — known as permission ads — focused on the impact of the Republican Governors Association attacks.

‘‘There is an abundance of contemporaneous evidence from multiple sources that permission ads ran in response to the RGA attack ads and that it made business sense for the Lottery to run the ads,’’ Parker said. ‘‘That evidence will be aired in court and at the appropriate time and not in the newspapers.’’

Internal campaign e-mails that emerged in October 2010 as part of a civil court case involving Cahill showed that the treasurer and his political staff had substituted the ads promoting his management of the Lottery in place of spots plugging individual Lottery games.

The revised ads did not mention Cahill by name, but pointed to the nearly $1 billion the Lottery gives to cities and towns and said: ‘‘That’s the result of a consistently well-managed Lottery. And luck has nothing to do with it.’’

As treasurer, Cahill was responsible for running the Lottery.

Coakley said that even though the agency’s ads did not name Cahill, they were to run in conjunction with campaign ads that highlighted his work at the Lottery.

Cahill, facing sharp criticism from Coakley, pulled the ad campaign on October 15, just two weeks before the election. The Lottery was able to recoup about $1 million of the more than $1.5 million worth of spots that had been booked with media outlets.

The ad campaign promoting the image of a well-managed agency was the most expensive of its type over the past decade. Until the gubernatorial campaign, the biggest ad purchase to promote the Lottery’s image was a $360,000 buy in 2008.

But that was when the Lottery had a $10 million annual advertising budget, meaning that the campaign consumed only 3.6 percent of that year’s overall budget. The next year, the Legislature slashed the agency’s advertising funding to $2 million.

The $1.5 million that Cahill planned to spend in the three short months represented a full 75 percent of its annual advertising budget.

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