The Republican vice presidential nominee has been accused of firing a state commissioner to settle a family dispute. But the report, to be released Friday afternoon, is also expected to touch on whether Palin's husband meddled in state affairs and whether her administration inappropriately accessed employee medical records.
Sensitive to accusations of political bias, lawmakers ordered the report be held under the utmost secrecy. Members of a legislative committee were forced to sign a confidentiality agreement before reading it, and each page contained a special watermark and a unique number to trace it if it was leaked.
The inquiry, approved by a bipartisan vote, began before Republican presidential nomineenamed Palin his running mate.
Since then, however, the case has been dogged by accusations of political influence, particularly after the Democrat overseeing the case, Sen. Hollis French, predicted an "October surprise" for the McCain campaign.
As lawmakers filed into a meeting room in downtown Anchorage, they were greeted by Palin supporters wearing red clown noses and carrying balloons, cheering that the circus was in town.
Despite all the controversy surrounding McCain's running mate, CBS News chief Washington correspondent Bob Schieffer said the scandal pales in comparison with the economic crisis facing the nation. Schieffer said that regardless of the outcome of Friday's report, the economy will continue to take priority in voters' minds.
Some Republicans have questioned why the committee has insisted on finishing the investigation Friday, which they said was an arbitrary date meant to damage the McCain-Palin campaign with less than a month to go before Election Day.
Before lawmakers broke for their closed session, Republican state Rep. Peggy Wilson questioned whether the committee was rushing to a conclusion without time to read the estimated 300-page report and 1,000 pages of supporting documents.
"This is a pretty serious thing and I don't feel comfortable even talking about it until I've got it all read," Wilson said. "I don't know if anyone else, maybe they're speed readers, but I spent hours on it yesterday and I didn't have time to read it all."
But the committee chairman, Democratic Sen. Kim Elton, offered no delay.
"I could have spent four days, but I do believe that within the first two to three hours, I had a good understanding of what the investigator's findings were," he said.
The legislative panel's investigation - one of two that are ongoing - focuses on Palin's firing in July of Public Safety Commissioner Walter Monegan. Monegan says Palin and her husband pressured him to fire Mike Wooten, a state trooper involved in a nasty divorce and custody dispute with the governor's sister. When Monegan resisted, he says, he was fired.
Palin's critics say that shows she used her office to settle family affairs.
"When you're the governor, you leave your household hat at home and you become governor," said state Senate President Lyda Green, a Republican who has frequently clashed with Palin.
The report is also expected to focus on Palin's husband, Todd, who had extraordinary access to the governor's office and her top aides. Todd Palin acknowledges calling and meeting over the course of many months with numerous senior government officials about Wooten, whom he described as a dangerous and unstable man who had threatened his family.
The McCain campaign sought to pre-empt the potentially embarrassing report this week by releasing its, attributing Monegan's firing to a legitimate dispute over budget priorities and control over the department. They contend that Monegan repeatedly tried to circumvent the governor and her top aides.
"It's not a legal matter as much as a political issue, a management issue, management of her staff," said Thomas Van Flein, an attorney hired by Palin to represent her in the matter.
Monegan had not seen the closely held report Thursday night and said he did not know what to expect.
"I just hope that the truth is figured out," Monegan said in a telephone interview Thursday. "That the governor did want me to fire him, and I chose to not. You just can't walk up to someone and say, 'I fire you.' He didn't do anything under my watch to result in termination."
In an interview with CBS News, Monegan said Todd Palin's involvement, "speaks to the level of his passion," or rather, Monegan said, Palin's "obsession" with the case.
Of Wooten, Monegan said, "He's not a bad cop."