She was one of Socred premier Bill Vander Zalm's closet cabinet ministers, serving in a variety of posts throughout his term. However in 1991 when Vander Zalm was forced to resign amid scandal allegations, the Social Credit party became bittery divided. Seeking to distance the party from Vander Zalm, Socred members voted Rita Johnston their new leader, over McCarthy. Johnston lost the 1992 provincial election badly, with the party only winning third-place status in the legislature. Johnson resigned as leader shortly after, and McCarthy was picked in her place.
However, McCarthy had no seat in the legislature, and the Socreds were being fast dismissed as an increasingly irrelevant political force in British Columbia. She stepped down as leader in 1994 amid further infighting. In the 1996 election the Socreds lost all their remaining seats.