Former Massachusetts Treasurer and gubernatorial candidate Timothy Cahill was indicted Monday by a grand jury that alleged fraud and conspiracy connected with $1.5 million in taxpayer-financed lottery advertisements during his 2010 run for governor, state Attorney General Martha Coakley announced.

A Suffolk County grand jury in Boston indicted Cahill, 53, of Quincy, on one count of violating the state ethics law and conspiracy to violate the state ethics law. Cahill was also indicted on one count of procurement fraud and one count of conspiracy to commit procurement fraud. 

The grand jury also indicted former Cahill aide Scott Campbell, 41, and Alfred Grazioso, 57, the former chief of staff of the state Lottery Commission.

“We allege that Treasurer Cahill abused his position to launch a television advertising campaign at the Lottery that was carefully coordinated to promote his own campaign for governor,” Coakley said in a statement.

“This was more than a million dollars in taxpayer money that was intended to benefit the public and the lottery. We allege that the timing, amount budgeted, and coordinated messages of the Lottery ads all point to a decision made by Treasurer Cahill to abuse his position of trust and put his own political ambitions over the best interests of the taxpayers he was elected to represent.”

According to Coakley, the indictments follow a comprehensive investigation by her  office that examined the timing and reason for lottery television and radio ads that began airing in September 2010. When Coakley’s office began its investigation one month later, it requested, and the lottery agreed, to immediately take down the ads pending the completion of the investigation.

Dozens of witnesses were interviewed and thousands of electronic communications examined to determine the purpose behind the $1.5 million ad campaign, Coakley said. As a result of that investigation, her office alleges that Cahill procured a series of advertisements, with Campbell’s assistance, to aid Cahill’s struggling campaign for governor rather than to simply boost the lottery’s image and sales. 

Cahill served two terms as treasurer as a Democrat before running for governor as an independent. He finished a distant third behind Gov. Deval Patrick, who won re-election, and Republican Charles Baker.

Democrat Steven Grossman, elected in 2010, succeeded Cahill as treasurer.

“These indictments detail fundamental and outrageous violations of the public trust, as well as gross abuse of public office,” Grossman said in a statement Monday. “We have cooperated fully with this investigation and will continue to do so. From day one, we have implemented long overdue reforms at Treasury to make it more transparent, professional and accountable to all citizens of the commonwealth.”

Cahill was not immediately available for comment. His wife, Tina, defended him in a Twitter message. “A good man is being persecuted for challenging the status quo,” she said.

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