Allentown Mayor Ed Pawlowski, who federal prosecutors say engineered a pay-to-play scheme brazenly selling city contracts and influence for campaign contributions, pleaded not guilty Thursday afternoon in federal court in Philadelphia to 54 counts in a federal indictment.

Standing next to his lawyer, Jack McMahon, and accompanied by his wife, Lisa, Pawlowski learned from U.S. Magistrate Judge Lynne Sitarski the conditions of his release, under which he will live and campaign for reelection while the case moves toward a trial.

Pawlowski was released on his own recognizance, but will be restricted from traveling outside the Eastern District of Pennsylvania, the federal court jurisdiction that includes Allentown.

Pawlowski's hearing came during an afternoon court session where Allentown attorney Scott Allinson, who is charged with fraud and bribery offenses in the same indictment as Pawlowski, and Rebecca Acosta, a former Reading school board member charged in a separate but related case against former Reading Mayor Vaughn Spencer, also entered not guilty pleas. They were granted pretrial release on similar terms as Pawlowski.

All three will proceed toward a trial before U.S. District Judge Juan R. Sanchez. No trial date has been set.

Indictments unsealed Wednesday spell out charges against five people in parallel corruption cases in Allentown and Reading. Both focus on the cities' mayors, who, according to acting U.S. Attorney Louis Lappen, orchestrated pay-to-play schemes by ensuring city contracts went to people or companies that contributed hundreds or thousands of dollars to their campaigns.

Prosecutors allege Allinson orchestrated donations from his law firm to campaign funds that benefited Pawlowski with the expectation that his firm would receive legal assignments from the city. Acosta is accused of supporting a plan to repeal a Reading ethics law to benefit Spencer and of using her role as school board president to obtain inside information on a construction project for a company seeking the contract. Prosecutors say she did both with the expectation she would receive contributions to a campaign fund.

Pawlowski, who has led the state's third-largest city nearly a dozen years, faces charges including extortion, bribery, and fraud in a 62-page indictment outlining a case that a federal prosecutor likened to selling City Hall to the highest bidder. Nine other Allentown officials, contractors, and developers have already pleaded guilty. They will be sentenced after prosecutors are satisfied they have fully cooperated under the terms of their plea agreements. They include former Managing Director Francis Dougherty, former Controller Mary Ellen Koval, and political consultant Mike Fleck, who managed campaigns for Pawlowski and Spencer.

Pawlowski and his lawyer told reporters outside the courthouse he is innocent and they plan to prove that in court.

"The fact that my integrity is being called into question is something that hurts me deeply. I know I'm innocent and I know I did nothing wrong," Pawlowski said.

"In reviewing the whole indictment, it doesn't appear the mayor did anything that was selling anything for contracts or anything of the sort. It just didn't happen," McMahon said.

Although Pawlowski is restricted to the nine counties in the Eastern District of Pennsylvania, Assistant U.S. Attorney Anthony Wzorek said the government had no objection to Pawlowski traveling to Delaware for a planned vacation in coming weeks. Prosecutors did require that Pawlowski not have contact with witnesses and codefendants in the case. If as mayor Pawlowski must speak to someone involved in the case, he must not discuss the case, Sitarski said.

Counties covered by the court district are Lehigh, Northampton, Berks, Bucks, Chester, Delaware, Lancaster, Montgomery, and Philadelphia.