Conservative councillor Bob Bibby
Bury councillor Bob Bibby and another Conservative member were detained with three other men after a series of police raids on Tuesday.
He said he would continue as a councillor while the investigation took place, and will "fight in whatever way I have means to clear my name on this".
The men have been bailed until April.
Greater Manchester Police's Serious Crime Division executed warrants at addresses in Greater Manchester and Lancashire on Tuesday.
Officers also seized computers and documents from Bury Town Hall.
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