BOSTON (CBS) – A second official charged in a federal corruption probe at Boston City Hall was arraigned Wednesday in Federal Court.

Timothy Sullivan, 36, of Dorchester, was named Wednesday in a two-count federal indictment charging him with conspiracy to extort a company and extortion of that company, and arrested Wednesday morning at his Dorchester home. He was released Wednesday afternoon on $25,000 bail.

Sullivan is the city’s Chief of Staff of Intergovernmental Affairs. He has been placed on unpaid leave from City Hall.

The U.S. Attorney’s Office says he and Kenneth Brissette withheld city permits in the summer of 2014 for the Boston Calling Music Festival on City Hall plaza last September until the production company hired union members.

Brissette, Boston’s top tourism official, was arrested in May and charged with union-related extortion. He pleaded not guilty. He faces a new charge in the indictment unsealed Wednesday.

“Brissette and Sullivan allegedly insisted that half of the company’s labor force consist of union members, although they ultimately agreed that eight members of Local 11 would suffice. As a result of these City officials’ demands three days before the music festival the company entered into a contract with Local 11 for eight additional laborers and one foreman. Shortly thereafter, the City of Boston issued the necessary permits,” the U.S. Attorney’s Office said in a statement.

A federal judge Wednesday ordered Sullivan to surrender his passport, and to stay away from a list of 30 alleged victims and alleged witnesses. Sullivan’s attorney, William Cintolo, said that keep-away order keeps Sullivan out of a job.

Sullivan's attorney says being ordered to stay away from witnesses puts him out of a job. He's now on unpaid leave from city hall. #wbz — Beth Germano (@BethWBZ) June 29, 2016

Cintolo called the case ‘crap,’ and said Sullivan did nothing more than set up meeting–not apply pressure to hire union workers.

“This is a crap piece of a case,” said Cintolo. “There will be evidence and one of the victims will testify that they do not believe they were threatened, coerced, or pressured.”

.@marty_walsh : "I've offered to work…with the U.S. Attorney's office and to get to the bottom of this…whatever's going on here." — Carl Stevens (@carlwbz) June 29, 2016

Boston Mayor Marty Walsh told reporters before an event in the North End Wednesday morning that the allegations are “simply really disheartening.”

“I feel bad about what’s happening here,” said Walsh. “It’s something I don’t stand for. If these allegations are true, I’m not happy about them.”

Walsh also said his administration does not encourage people to use union labor.

“There’s a process in place, we have 800 events a year in the city of Boston,” Walsh said Wednesday. “The topic of union labor should never come up, and to my knowledge it hasn’t.”

Occurrences such as these, Walsh said, are the reason he put ethics training in place for all of his department heads. The mayor said he is cooperating with the U.S. Attorney’s investigation, and has yet to say if he has testified before the grand jury.

WBZ NewsRadio 1030’s Carl Stevens reports