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Tim Cahill had known his 2010 campaign was lost

Timothy Cahill’s number two at the state Treasury was a volunteer on his 2010 gubernatorial campaign, though a conversation with the candidate at his Quincy headquarters shook her desire to continue helping, she testified Monday.

Grace Lee, former first deputy treasurer, said she visited the headquarters on state primary day, Sept. 14, 2010. When ­Cahill arrived at the offices, she spoke to him about Treasury business, including concerns Mark Cavanagh, then executive director of the Massachusetts State Lottery, had raised about a series of lottery ads that were in the works before the gubernatorial election in which ­Cahill was a candidate.

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On Tuesday, Lee testified that Cahill knew his campaign was lost when she spoke with him on primary day. Lee testified that Cahill had an “irritated tone” and raised his voice as he explained that Cavanagh’s concerns had already been ­addressed.

“I already talked to Mark about this,” Lee said in court, paraphrasing Cahill’s remarks. “This has nothing to do with the campaign. I’m still the state treasurer, and I have to do my job.”

About the decision to run ads touting the lottery so close to the election, Cahill said, “I’m damned if I do; damned if I don’t,” said Lee.

The exchange, which took place days before the lottery ads were authorized, discouraged Lee, who later texted a friend, “I’m done.”

“I was a volunteer, and I thought that the conversation was a little rough,” Lee said, explain­ing her state of mind to prosecutor Eileen O’Brien, no relation to the other prosecutor in the case, James O’Brien.

Cahill’s lawyer, Jeffrey Denner, questioned Lee about her conversation with Cahill on primary day.

“He knew his campaign was lost?” Denner asked.

“Yes,” Lee replied.

Cahill and his campaign finance director, Scott Campbell, are on trial, accused by the attorney general’s office of conspiring to run publicly funded lottery ads in the final weeks of the election to boost Cahill’s chances against Governor ­Deval Patrick and Republican candidate Charles D. Baker. Cahill and Campbell have pleaded not guilty.

After several aides defected from the campaign and e-mail messages made public suggested Cahill’s media consultant was involved in the decision to run the lottery ads, Lee asked Cahill about the situation and was put at ease by his reply.

“Absolutely nothing untoward has happened here,’’ Cahill told Lee in a mid-October reply that was related in court by Denner. “You know. You were a part of it. He said, “You know that the lottery ads have nothing to do with the campaign.”

“I believed him,” said Lee, who now works as a special counsel at Eckert Seamans law firm.

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