By Marty Graham

SAN DIEGO, Aug 20 (Reuters) - The former head the U.S. Border Patrol agents union pleaded innocent on Monday to siphoning off union and government funds to enrich himself, claiming outside court that the charges were retaliation against him for speaking out against the government.

Terence "T.J." Bonner, who served for 22 years as president of the National Border Patrol Council, was indicted last week on accusations that he siphoned off hundreds of thousands of dollars in part to maintain a mistress in Chicago and pay for pornography.

He entered not guilty pleas to 11 counts of wire fraud and one count of conspiracy to commit wire fraud during a brief hearing in U.S. District Court in San Diego.

A judge allowed Bonner to remain free on a $100,000 bond after his attorney, Eugene Iredale, told the court Bonner was not a flight risk because he intends to vigorously fight the charges against him.

The indictment charges Bonner with submitting false claims from the union fund for business travel, overtime and weekend wages, and for reimbursement for credit card and other expenses.

Some of those reimbursed claims include money for hard drives loaded with pornography purchased with union credit cards and others were for trips to see a mistress in Chicago that were represented as union business, according to the indictment.

Outside court Bonner said the charges were in reprisal for his vocal criticism of the U.S. Department of Justice.

"It is retaliation and they are out to discredit me for speaking out in the past and the future," he said. "It is a very strong message to anyone else in the agency who might be thinking about speaking out - character assassination is a pretty effective way of discouraging people."

Federal prosecutors declined to comment outside court.

Bonner has blasted the Justice Department over the failed "Fast and Furious" gun-running investigation, an operation intended to track weapons sold in Arizona that were suspected of being transported to Mexican drug cartels.

Officials with the Bureau of Alcohol, Tobacco, Firearms and Explosives lost track of many weapons and some were allowed to enter Mexico.

The operation became public when two guns found at the scene along the Arizona border with Mexico where U.S. Border Patrol agent Brian Terry was killed in December 2010 were traced back to Fast and Furious. (Reporting By Cynthia Johnston)

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