In a 20/20 interview, Palin told ABC News' Charles Gibson that she dismissed Monegan for poor job performance and that neither she nor her husband pressured Monegan to fire Wooten.
"We never did. I never pressured him to hire or fire anybody," she said.
But Monegan told ABC News that he was summoned to a meeting with Todd Palin in December 2006, shortly after his wife became governor.
"I was called to her Anchorage formal Governor's office to talk with Todd Palin about an issue that was a private family matter," recounted Monegan. Todd Palin became "upset," Monegan said, when told the allegations had already been investigated and the case would not be re-opened.
Sarah Palin initially agreed to "cooperate fully" with the Alaska state legislative investigation but since being chosen as John McCain's running mate both she and her husband have refused to testify voluntarily. Last week, the legislature issued a subpoena for Todd Palin and a group of Palin aides.
At that time, Palin's lawyers said those subpoenas were a "legal issue that will have to be evaluated and discussed with clients."
This case is something of a departure for Liberty Legal Institute, which has focused almost exclusively on religion and state and First Amendment cases for individuals, groups and churches since its founding in 1997. Sasser said that recently his group has "branched out, getting involved in broader constitutional issues."