Sen. Barack Obama’s campaign e-mailed a new video ad to supporters Monday reminding them of Sen. John McCain’s mid-career scandal involving a corrupt savings and loan owner — a quick retort after McCain’s running mate Sarah Palin blasted Obama’s ties to controversial ’60s radical over the weekend.

The Alaska governor, speaking to supporters in California, said the Illinois senator “pals around with terrorists” in reference to a New York Times story on Obama’s association early in his political career with his Chicago neighbor Bill Ayers, a founder of the radical and violent Vietnam-era Weather Underground group.

“Its members were blamed for several bombings when Obama was a child,” the Associated Press reported, adding “Obama has denounced his radical views and activities.”

In 1995, Ayers hosted a small campaign event for Obama.

McCain adviser Nancy Pfotenhauer, appearing with Obama’s communication director, Robert Gibbs on ABC’s “Good Morning America,” said the McCain campaign was trying to give Americans information about Obama’s past and future plans in an effort to help “the decision they have to make about these two individuals.”

In response, Gibbs accused the McCain campaign of running “a despicable smear campaign.”

Obama’s new ad emphasizes a time in the mid-1980s, when McCain came under fire along with four other senators for accepting campaign funds from Lincoln Savings and Loan Association head Charles Keating, who was later charged fraud and racketeering.

The Senate Judiciary Committee investigated eventually dropped its case against McCain, but said his involvement with Keating was questionable.

The ad is part of a longer video that runs for more than 13 minutes on KeatingEconomics.com, an Obama campaign-funded site that goes more in-depth into the controversy.

In a statement regarding the Keating Five ad, Obama campaign manager David Plouffe said
McCain’s Keating history is relevant and voters deserve to know the facts.

McCain lawyer John Dowd quickly responded to the ad, calling the Keating incident a “classic political smear job” by the Democrats running the Senate during that time, the Washington Post reported. “John had not done anything wrong,” Dowd said, noting that McCain cut all ties to Keating once the Justice Department began its investigation of him.

Another McCain lawyer, Robert Bennett, said that “it was unfair for McCain to be included as part of the Keating Five,” according to the Post. McCain was the only Republican among four Democrats to be called under question at the time.

The Keating Five ad highlights an escalation of attack ads on both sides of the presidential race. The McCain campaign Sunday released a new ad entitled “Dangerous” that mentions Obama’s vote on troop funding and ties him to other liberal leaders in Congress.

“Congressional liberals voted repeatedly to cut off funding to our active troops, increasing the risk on their lives: how dangerous,” the ad’s announcer says.

The two candidates will face off in their second presidential debate Tuesday night in Nashville, Tenn.