The decision Thursday sets the stage for state lawmakers to release a report on their investigation Friday. The report could prove to be an embarrassment for Palin and a distraction for's presidential campaign in the final weeks of the race.
Lawmakers are investigating whether Palin abused her power to settle a family dispute. Her former public safety commissioner says he was dismissed after resisting pressure to fire a state trooper, Mike Wooten, who had gone through nasty divorce from Palin's sister.
Republican lawmakers had sued to block the report, saying it had become politicized.
Palin's husband and top aides said in affidavits provided to The Associated Press that the governor remained in the dark while Todd Palin repeatedly asked top state officials to help get his former brother-in-law kicked off the state police force.
The affidavits filed with investigators late Wednesday will probably help Palin's defense that the firing was not a tit-for-tat, but they also portray her as uninvolved while her husband met repeatedly with her aides about family affairs. That could provide fodder for her political opponents.
"Todd Palin's statements may help provide the Governor some degree of cover in the probe," said CBSNews.com senior political editor Vaughn Ververs, "but the level of his involvement here will probably raise even more questions and this continues to be a political distraction to the McCain campaign."
"I have heard criticism that I am too involved in my wife's administration," Todd Palin wrote in his affidavit. "My wife and I are very close. We are each other's best friend. I have helped her in her career the best I can, and she has helped me."
The documents, released on the same day the state Supreme Court heard arguments in a lawsuit designed to block the probe, describe Todd Palin's extraordinary level of access to a variety of the governor's top aides.
He told them emotional stories about Wooten threatening and emotionally abusing his family. He said he talked to anyone who would listen. He gave them photos and documents, which they forwarded to others in the administration, and he questioned how Wooten kept his job.
"I've felt empathy for the Palin and Heath families in having to endure harassment, intimidation, threats and abuse from a former family member," Frye wrote.
But Frye said she never talked about it with the governor or mentioned the idea of asking Public Safety Commissioner Walter Monegan to fire Wooten.
Monegan says he was fired for not dismissing Wooten, a claim that touched off the politically charged investigation just before McCain chose Palin as his running mate. Palin says she fired Monegan over a budget dispute. The documents filed late Wednesday bolster that claim and also describe an effort by Monegan to wrest control of the department away from Palin.
Todd Palin said he never pressured anyone - including his wife. In fact, he says that after talking about the matter with her repeatedly, she finally told him to "drop it."
"Anyone who knows Sarah knows she is the governor and she calls the shots," Todd Palin wrote. "I make no apologies for wanting to protect my family and wanting to publicize the injustice of a violent trooper keeping his badge."
Republican lawmakers argued Wednesday before the state Supreme Court that the legislative inquiry should be shut down and the report not released. Palin is not a part of that lawsuit. The state's personnel board also is looking into the matter and Palin has said she feels that inquiry is more appropriate.
The Supreme Court said it would rule promptly but did not say when.