Over the weekend, GOP vice presidential nominee alleged that Barack Obama was "palling around with terrorists who would target their own country," referring to his association with Bill Ayers, founder of the violent Weather Underground group during the Vietnam era.
In response, Democrats denounced Palin's charge and warned that it would trigger reexaminations of John McCain's past. Sure enough, Obama's campaign released a Web video and a letter about McCain's role in the Keating Five scandal from the early 1990s.
Advisers to Obama and McCain defended their candidates Monday on CBS News' The Early Show.
Nancy Pfotenhauer, an adviser to the McCain campaign, said Obama has "very questionable judgment in foreign policy" and has "relationships with individuals that I think call into question his judgment."
"In four short weeks, Americans are going to pull the lever for the man who will be the next commander-in-chief of our country in a time we face tremendous challenges both here with our economy and aboard," Pfotenhauer said. "And with Barack Obama, we know very little about this man. He has a very, very scant record and he, frankly, obfuscates or hides that record frequently on domestic issues."
Obama's communications director, Robert Gibbs, countered that the charges from the McCain campaign are happening because Republicans want to talk about something other than the struggling economy.
"The McCain campaign would much rather engage in a character assassination smear campaign than talk about their plans to make this economy strong again. That's not what people deserve in this election," Gibbs said.
Gibbs also responded to the specific charges about Obama and Ayers and brought up McCain's connections to Charles Keating.
"Bill Ayers has played no role in Barack Obama's campaign. Barack Obama has condemned the attacks that happened when Barack Obama was 8-years-old," he said. "Charles Keating is relevant in this campaign because the actions of a United States senator to pressure regulators … against stopping criminal activity at a savings and loan that cost tens of thousands of people their life savings is relevant in the very current news that we have in our struggling economy where we're watching banks collapse each and every day. Is that the kind of leadership, is that the kind of person we trust to get our economy going again?"
On ABC's "Good Morning America," Pfotenhauer said she thought that commercials that raise new questions about Obama's associations "have struck a nerve" with the Democrat.
The names being bandied about - Bill Ayers and Charles Keating - are unfamiliar to millions of Americans, and their wrongdoings occurred decades ago. But political operatives dredged them up over the weekend, and they could play a prominent role in the campaign's final month.
Ayers was a founder of the violent Weather Underground group during the Vietnam era. Its members were blamed for several bombings when Obama was a child. Obama has denounced Ayers' radical views and activities.
The two men live in the same Chicago neighborhood and once worked on the same charity board. Ayers hosted a small meet-the-candidate event for Obama in 1995, early in his political career. Obama strategist David Axelrod has said the two men are "friendly."
On Sunday, Palin defended her earlier comments about Obama and Ayers. She told reporters in California that her comments were about "an association that has been known, but hasn't been talked about. I think it's fair to talk about where Barack Obama kicked off his political career, in the guy's living room." (Read more)
In fact, Obama was questioned about Ayers during a prime-time Democratic debate against Sen. Hillary Rodham Clinton before April's Pennsylvania primary.
"The heels are on, the gloves are off," Palin said of her campaign strategy.
In an interview in The New York Times published Monday, Palin also spoke about Obama's relationship with the Rev. Jeremiah Wright, who made anti-American comments even though McCain had said talk of Wright was off limits.
Palin said, "I don't know why that association isn't discussed more, because those were appalling things that that pastor had said about our great country."
At a Monday morning rally in Florida, Palin kept up her criticism of Obama and Ayers, though this time she referred to him as a "former terrorist."
Obama, speaking Sunday to thousands at an outdoor event in Asheville, N.C., fired back. He said McCain and his aides "are gambling that he can distract you with smears rather than talk to you about substance."
He described the criticisms as "Swiftboat-style attacks on me," a reference to the unsubstantiated allegations about 2004 Democratic nominee John Kerry's military record in Vietnam.
Other Democrats rushed to Obama's defense. Veteran party activist Hillary Rosen, on CNN's "Late Edition," said, "If they throw mud like that, then you go back to Charles Keating, you go back to Sarah Palin's investigation." She was referring to inquiries into the firing of Alaska's top police official.
"You know, I just don't think that John McCain wants to take this nuclear strategy," Rosen said.
Just months into his Senate career, in the late 1980s, McCain made what he has called "the worst mistake of my life." He participated in two meetings with banking regulators on behalf of Keating, a friend, campaign contributor and savings and loan owner who was later convicted of securities fraud.
The Senate ethics committee investigated five senators' relationships with Keating. The panel cited McCain for a lesser role than the others, but faulted his "poor judgment."
Obama's new Web video, being e-mailed to millions of his supporters, summarizes a 13-minute Web "documentary" that the campaign plans to distribute Monday.
Obama campaign manager David Plouffe said in a statement, "McCain's Keating history is relevant and voters deserve to know the facts."
On Sunday, Obama also unveiled a TV ad on the economy that describes McCain was "erratic in a crisis." Some see that as a reminder of McCain's age, 72.