SAN DIEGO -- Chula Vista City Councilman Steve Castaneda pleaded not guilty Thursday to charges that he lied to a county grand jury investigating whether he got special treatment in an apartment rental deal.

Castaneda, 47, was indicted last week on 13 felony perjury charges and two misdemeanor counts of failing to disclose income on a statement of economic interests form regarding a separate 2006 land deal in Chula Vista.

Deputy District Attorney Patrick O'Toole said outside court that his office heard about Castaneda's alleged wrongdoing in April 2006, just before the June 2006 primary election, in which he lost the mayor's race to Cheryl Cox.

O'Toole said his office and the grand jury were investigating the circumstances under which Castaneda lived in the complex and whether he was getting any special deals or treatment.

The prosecutor said Castaneda told him last year that he moved into the apartment complex just because he wanted a place to live, that it was an "up-and-up rental."

"In fact, he had had contact with the owner through an intermediary from the very beginning about moving in there, intending on wanting to buy, which would have entitled him to special discounts that other tenants were getting if they were planning to buy there," O'Toole said.

Castaneda, a Chula Vista councilman since 2004, claimed earlier this year that District Attorney Bonnie Dumanis was conducting a "political witch hunt" against him in an effort to get him to resign.

"There was nothing leaked about this investigation," O'Toole told reporters. "Nothing was done to hurt him politically.

"But after that election was over, I brought him in, put him under oath and asked him what happened," the prosecutor said. "Mr. Castaneda, according to the grand jury indictment, lied about it, saying that it was just a regular rental, that he wasn't moving in there trying to buy or anything else like that."

Castaneda faces a maximum of four years in prison if convicted, O'Toole said.

Castaneda's attorney, Marc Carlos, standing with his client at his side, told reporters he just received the indictment Thursday.

"Quite frankly, we've dealt with this before," Carlos said. "Mr. Castaneda's been a lifelong resident, a businessman and devoted politician here in San Diego for a number of years.

"He asserts his innocence," Carlos said. "He will fight this case. That's why he didn't enter a plea before the case was indicted."

Superior Court Judge Jeffrey Fraser set a status/readiness conference for Sept. 6. Trial was scheduled for Oct. 22.