Her testimony is an attempt to undercut prosecution charges that James abused his office by steering nine city lots at discounted rates to co-defendant Tamika Riley.
Riley is a former boutique owner who prosecutors say bought the properties for $46,000 and quickly sold them for $665,000 without making required improvements.
Prosecutors say the 72-year-old James was having an affair with Riley, who is 39.
Their defense lawyers have maintained that Riley paid the standard rate for distressed properties.
On cross-examination, Chaneyfield-Jenkins said she was not aware that Riley did not rehabilitate the properties.
The federal jury also heard Tamika Riley's voice when a prosecutor played a tape of a council meeting in which Riley told members that she had developed 10 properties after overcoming obstacles as a black woman trying to get started in real estate.
"I just went forward and kept learning," Riley told the council, including Chaneyfield-Jenkins.
Chaneyfield-Jankins said she was not aware of a relationship between James and Riley.
The former councilwoman, who served for over 10 years before leaving in June 2006, said the council relied mostly on information from the city's housing officials when it approved the sale of Newark-owned property.
Prosecution witnesses have said James, mayor for 20 years until 2006, was directly involved in the process.
Testimony in the federal trial, which began March 3, could conclude this week.
James faces five charges, including fraud and conspiracy. Riley faces those charges and eight others, including tax evasion.
After this trial, James is to be tried on charges he used city-issued credit cards to pay for $58,000 worth of personal expenses while he was mayor, including trips with several women other than his wife to Martha's Vineyard, Puerto Rico, the Dominican Republic and Rio de Janeiro.
James, as leader of the state's largest city, is among dozens of New Jersey politicians snared by FBI investigations over the past several years. He is one of just a handful who haven't pleaded guilty.
In a light moment Tuesday, testimony by Chaneyfield-Jenkins was briefly halted when a cell phone rang. James, seated at the defense table, reached into a pocket to silence the machine.
"Tell him you're on trial," Chaneyfield-Jenkins said.
