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Asheville, N.C. (AP) – Asheville, N.C. (AP) – The McCain and Obama presidential campaigns traded accusations of mudslinging Monday in the wake of new ads dredging up infamous events from 20, 30, even 40 years ago.

Nancy Pfotenhauer, an adviser to the McCain campaign, said it’s “absolutely essential” that Americans hear not only about his plans for the future but also “about the decision they have to make about these two individuals.” She said she thought that commercials that raise new questions about Obama’s associations “have struck a nerve” with the Democrat.

Obama’s communications director, Robert Gibbs, countered that the new McCain offensive – including GOP vice presidential nominee Sarah Palin’s allegation that Obama “pals around with terrorists” –is happening because Republicans want to talk about something other than the struggling economy.

Gibbs, who appeared with Pfotenhauer on ABC’s “Good Morning America” Monday, charged that the McCain campaign is resorting to “a despicable smear campaign.”

Democrats on Sunday had denounced Palin’s charge and warned that it would trigger reexaminations of 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.

McCain “does not want to play guilt-by-association, or this thing could blow up in his face,” Democratic strategist Paul Begala said on NBC’s “Meet the Press.”

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.

Palin, the Alaska governor, defended her earlier comments about Obama and Ayers, in which she said the Democratic nominee is “palling around with terrorists who would target their own country.”

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 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.”

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.

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.