She portrayed Diaz, who she said was a "great employee and an extended member of our family," as a victim of manipulation by Allred.
"I think Nicky had a gun to her head," Whitman said and called Allred "a very sophisticated attorney who has done this for a living over 20 years."
Allred declined to provide specifics about how she came into contact with Diaz, saying only that another lawyer had referred the former Whitman family housekeeper to her law office. As for her connections to Brown, Allred said that she had no contact with anyone on the state attorney general's campaign and had not seen or spoken to Brown recently.
The Whitman campaign said that Allred made donations to Brown in 1982 and 2006 as and highlighted Allred's ties to the Democratic Party.
Brown, who is locked in a tight race with his well-funded GOP opponent, issued his own statement on the matter Wednesday night. "Once again, Meg Whitman has shown that she thinks the rules don't apply to her," he said. "From the start, Meg Whitman has failed to tell Californians the truth."
At a news conference on Wednesday a tearful Diaz told reporters that Whitman fired her after nine years spent cleaning the couple's 3,700-square-foot home in an upscale Northern California suburb and shuttling their children to and from school and appointments.
"From now on you don't know me and I don't know you," Diaz said Whitman told her in the summer of 2009 after asking for legal help sorting out her immigration problems. "I was shocked and hurt that Ms. Whitman would treat me this way after nine years. I realized at that moment that she didn't appreciate my work. I felt like she was throwing me away like a piece of garbage."
In her initial statement on the matter when the controversy began brewing on Wednesday Whitman said, "Nicky had falsified the hiring documents and personal information she provided to the employment agency that brought her to us in 2000." The statement continued, "Nicky told me that she was admitting her deception now because she was aware that her lie might come out during the campaign."
Whitman's campaign provided an employment questionnaire Diaz filled out in 2000 in which she stated that she could legally accept work in the United States, as well as copies of immigration and W-4 forms, a California driver's license and a Social Security card all in Diaz's name.
Allred said that Whitman initially hired Diaz to work 15 hours per week for $23 an hour, but that over time the family asked Diaz to perform additional duties without paying her for extra time or providing reimbursement for mileage. On Thursday Whitman also denied that charge, saying that Diaz was paid for all the hours she worked and then some.
At Thursday's news conference Whitman attempted to pivot from the housekeeper controversy to immigration issues, saying that the entire episode pointed to the need for an "E-Verify system and a temporary guest worker program so that good people like Nicky can work in this country legally."
But with about a month to go before voters go to the polls, Whitman emphasized her that the allegations of Allred and Diaz were "completely untrue."
"They lack any merit whatsoever," she said. "This is truly a political smear on me on my family and based on lies and is designed to divert attention from the issues that really matter."