Economic Slump Underlines Concerns About McCain Advisers

"People who want greater involvement in the markets always see in any crisis the need to expand government control," he said. "That always happens."

Gramm has some unlikely defenders. Robert Litan, a Brookings Institution economist who advised the Clinton administration on financial industry deregulation, said that if anything, the crisis might have been mitigated if Gramm had gotten more of his way when he opposed the Community Reinvestment Act in the 1990s.

Gramm maintained that the act, which allowed regulators to review a bank's record on lending to the poor before approving financial industry mergers, allowed advocacy groups to effectively blackmail banks into making risky loans in poor communities. But the Clinton administration prevailed in saving the CRA.

"If they wanted a merger approval, they had to show they were making a conscious effort to make loans to subprime borrowers," Litan said. "If the CRA had not been so aggressively pushed, it is conceivable things would not be quite as bad. People have to be honest about that."

Gramm, as a former Senate colleague, has an older, deeper connection to McCain, but Fiorina may soon be more closely identified with him. Since McCain installed her last month at the Republican National Committee, the once-high-flying chief executive has held conference calls, made near-daily television appearances and become the face of McCain's economic team.

"John McCain understood the positive role of government in incenting and motivating innovation," Fiorina said yesterday in an interview, recalling their first meeting in 2000.

But until recently, Fiorina's claim to fame was 5 1/2 rocky years at Hewlett-Packard, where she battled the company's founding families to push forward with a $19 billion purchase of Compaq Computer in 2002, then failed to create the profitable computer giant she had promised. In February 2005, she was publicly ousted by HP's board, but not before she ordered the first of a series of leak investigations that would spin into a highly publicized scandal.

Alarmed by leaks of boardroom deliberations to reporters covering the technology industry, HP authorized investigations that would ultimately involve private investigators lying to phone companies to obtain personal phone records, bogus e-mails to reporters complete with tracer software to track forwarding, even a plan to infiltrate newsrooms with spies posing as clerical workers and cleaners.

Those efforts were tied most directly to Hewlett-Packard's former chairwoman, Patricia C. Dunn, but in her 2006 memoir, Fiorina wrote that she had ordered the first investigation a month before her ouster following a Wall Street Journal report on an impending corporate reorganization.

Fiorina said yesterday that all she had done was ask the company's outside legal counsel, Larry W. Sonsini, to interview all of the board members about the leaks, a process that took two weeks. She regretted using the term "investigation" in her book.

"It is factually inaccurate to connect me to the spying scandal at HP," she said.

As for the Compaq merger, Fiorina said she has been more than vindicated for her aggressive management.

"The results have validated the wisdom of the decision and the timing of the move," she said.