A former trustee of the state pension board testified Wednesday that she felt "very uncomfortable" when a top aide to then-Gov. Parris N. Glendening joined in pressuring her to increase the pension portfolio of an investment banker with whom she had a romantic relationship.
But Debra B. Humphries insisted that the money manager, Nathan A. Chapman Jr., never tried to persuade her to do anything she considered illegal.
Chapman, who at one time managed the investment of $140 million in state pension funds, is accused of improperly investing millions of that money in his own struggling companies, losing $5 million in the process.
Humphries, testifying for the prosecution in Chapman's federal fraud trial, said Glendening's chief of staff, Major F. Riddick Jr., called her in 2000 and urged her to vote for restoration of funds the board had withdrawn from Chapman's control.
"He asked for my support in returning the funds," she said, recalling that there was "urgency in his voice."
The next year, she testified, Riddick called again, asking her to muster board support for a $100 million increase in Chapman's pension portfolio.
"In that conversation, he did tell me that we had to help Mr. Chapman out," Humphries testified. She said Riddick told her that the governor would lobby other board members himself.
"That phone call, I thought, was a lot more pressure," Humphries testified. "It was a very tense conversation. He just kept going on and on."
Chapman was viewed as politically close to Glendening, and he served as president of the University System of Maryland Board of Regents. Glendening later acknowledged his interest in becoming chancellor of the university system after his term as governor expired.
The pension board enlisted Chapman's money management services in part to comply with state requirements that minorities receive a portion of the investment business.
Under cross-examination by defense attorney William R. "Billy" Martin on Wednesday, Humphries said she felt "boxed" in by the pressure because of her secret romance with Chapman.
She said, however, that Chapman himself did not take advantage of their relationship to promote his financial interests.
"You never felt that Mr. Chapman had you in a position to use you on the pension board, did you?" Martin asked.
"No, I did not," Humphries replied.
She added: "I always did my best to do a good job."
Humphries has pleaded guilty to lying to a grand jury about more than $46,000 she received from Chapman during the final months of their affair, which lasted from 1996 to 1999.
She failed to mention the money and other gifts on financial disclosure forms filed with the State Ethics Commission. She omitted the information, she said Wednesday, because she knew including it would reveal her relationship. She was, she said, "too embarrassed."
The cross-examination of Humphries came as the government concluded its case in Chapman's fraud trial in U.S. District Court.
Chapman is charged with mail fraud, wire fraud and other crimes in connection with alleged schemes that, according to prosecutors, cost the pension fund $5 million and resulted in losses of almost $500,000 to companies he controlled.
Although she contended she never felt directly pressured by Chapman, Humphries acknowledged Tuesday that Chapman "expected my support" because he recommended that Glendening appoint her to the pension board in 1997.
On Wednesday, prosecutors detailed votes Humphries cast to increase the pension funds Chapman managed -- and for which his companies earned fees -- by tens of millions of dollars. She voted in the spring of 2000 to reduce that amount by $100 million, but then, that May, supported restoring the assets to his control in a resolution that would not have passed without her vote.
As part of her immunity agreement, Humphries has not been charged in connection with the incomplete financial disclosure forms. Her sentencing has been delayed pending the completion of her testimony. Chapman, whose own disclosures to the state ethics agency have not been challenged, is charged with mail fraud in connection with the forms Humphries submitted.