A former state pension board member testified Tuesday that money manager Nathan A. Chapman Jr. showered her with jewelry and cash during a three-year love affair and that he expected her support on the board because he had recommended her appointment to then-Gov. Parris N. Glendening.
Debra B. Humphries, who was convicted last year of lying to a grand jury about the cash she received from Chapman, testified under a grant of immunity at Chapman's fraud trial in U.S. District Court here.
Chapman, who managed $140 million in investments for the state pension fund, is accused of investing millions of that money in his own struggling companies, losing $5 million in the process.
"I understood that he expected my support, but he would have expected it with or without the relationship . . . because he was responsible for my appointment," Humphries said.
She and Chapman never discussed his expectation, she said, but she considered it implicit after an aide to Glendening told her Chapman had suggested her appointment -- and Chapman later confirmed that to her.
Glendening's role figured prominently as the government moved toward the conclusion of its case against Chapman, who also is a former president of the state university system's Board of Regents, on charges of wire fraud, mail fraud, securities fraud and other crimes.
Another former board member testified that Glendening urged him in August 2001 to support an increase in the amount of funds Chapman was managing. And a Cabinet-level state budget official who also was a pension board member said she met with Chapman that same year after Glendening's chief of staff, Major Riddick, told her "there was interest in helping him."
Under questioning from defense attorneys, Thelma Eloise Foster, the former secretary of the Department of Budget and Management, said she never discussed the matter directly with Glendening but did not consider her attempt to help Chapman improper. The pension board was far short of requirements for minority participation under state law, she said, and arranging to increase Chapman's allocation was merely "good public policy."
Neither the former governor nor Riddick responded to phone calls requesting comments on the testimony.
Chapman, a married man, did not appear to look at Humphries as she testified for nearly an hour at the end of the day, saying their affair began in 1996 and continued until 1999. She said he gave her more than $46,000 toward the end of the relationship, when she was unemployed. She faces up to a year in prison at a sentencing that has been delayed until after completion of her testimony in Chapman's trial, according to Chapman's attorneys.
She testified that she was surprised to learn, after her appointment to the pension board in 1997, that Chapman was among those responsible for managing the fund.
"At the time, I was, I guess, a little conflicted," she said, adding later that she discussed it with Chapman and "he didn't seem to think it was a problem."
Humphries did not recuse herself from matters related to Chapman. She did not disclose the relationship to other board members or mention the gifts and cash on her financial disclosure forms.
The other former board member, George Bruce Harrison, a retired pilot with the Maryland State Police, said Humphries once told him to expect a call from Glendening about Chapman's request to handle more money from the pension fund. The call never came, he said, but less than a month later, in August 2001, he found himself flying the governor to Rhode Island.
"We got off the plane. He said, 'Bruce, I'd like to talk to you for a second,' " Harrison testified.
He said Glendening spoke of his strong advocacy for increasing the amount of state business with minority-owned firms and then told him other board members would soon recommend an increase to Chapman's allocation.
"I hope you can support it," Harrison recalled the governor saying.
Harrison said the expected proposal did not materialize.
In her testimony, Foster, now an assistant dean at the University of Maryland School of Medicine, said Riddick contacted her in spring 2001. "He indicated that Mr. Chapman was interested in getting additional money from the pension system and there was interest in helping him," she said.
It was not made clear who specifically was interested, she said. In a subsequent meeting at a restaurant, Chapman "indicated that the governor was willing to help him," she testified.
Prosecutors entered into evidence three memos she wrote to Glendening that August in which she urged him to personally lobby pension board members, including Harrison, whose votes were considered "critical to our success."
Under questioning from defense attorney William R. "Billy" Martin, Foster said FBI agents who interviewed her "asked a lot of questions about Major, asked a lot of questions about the governor." Outside of court, Martin said the testimony about Glendening does not have "any significance" in the case against Chapman.
The indictment against Chapman accuses him of committing several frauds against his own companies and the pension fund.