(Adds details from the arraignment, indictment)
By Laila Kearney
SAN FRANCISCO, April 8 (Reuters) - A prominent California state senator and gun-control advocate pleaded not guilty in a federal courtroom in San Francisco on Tuesday to charges of corruption and conspiracy to traffic in firearms.
Leland Yee, 65, who was arrested last month and has since been suspended with pay, was criminally charged along with about two dozen other individuals in a broad sweep of suspected organized crime and corruption activity in San Francisco.
He is the third Democratic state senator to face criminal charges this year in separate cases that have cost his party a cherished two-thirds majority in the upper chamber of the California legislature in an election year.
Senator Ron Calderon was indicted on corruption charges and Senator Roderick Wright was convicted of lying about living in the district he sought to represent. They too have been suspended with pay.
Appearing in court for his arraignment, Yee said little during the hearing except to acknowledge to the judge that he understood the proceedings.
Defense lawyer James Lassart entered not guilty pleas on his client's behalf to six counts of corruption and a single count of conspiracy to traffic in firearms. Federal prosecutors say each of the charges carries a maximum sentence of 20 years in prison.
The judge allowed Yee, who was ordered to return to court on Friday, to remain free on $500,000 bond after the senator and his wife agreed to put their house up for collateral.
A 31-page indictment returned by a grand jury last week accused Yee, a one-time candidate for San Francisco mayor, of accepting bribes in the form of campaign contributions from undercover FBI agents posing as individuals seeking political favors in return.
The indictment also said Yee, who withdrew from a race for California secretary of state after his arrest, accepted cash from an undercover agent posing as a customer seeking to purchase illegal weapons.
One of Yee's co-defendants, Keith Jackson, a former campaign consultant accused of serving as the middleman between the senator and those seeking political favors, also pleaded not guilty.
Another major figure in the case, Raymond "Shrimp Boy" Chow, an accused San Francisco Chinatown underworld boss charged with money laundering and conspiracy, was permitted to postpone his plea after his lawyer, Tony Serra, asked for more time.
Following the hearing, Serra said he would mount a defense for Chow raising questions of entrapment, "and obviously issues of racism will be addressed."
"We will be putting the government on trial," he told reporters outside the courtroom. "Law enforcement is supposed to investigate crime and criminal activity. In this case, they created crime and criminal activity."
The lawyer for Yee, who has sought to distance himself from Chow, declined to comment after the proceedings. (Reporting by Laila Kearney; Writing by Steve Gorman; Editing by Cynthia Johnston, Gunna Dickson and Dan Grebler)