Allies of Palin, the Republican vice presidential nominee, had sued to halt the Legislature-initiated investigation, saying the investigation is an attempt by Democrats to sabotage the GOP ticket.
The justices unanimously upheld an Anchorage judge's ruling last week that dismissed the Republican lawsuit and upheld subpoenas for top Palin associates.
The Alaska Legislature's bipartisan Legislative Council unanimously commissioned the investigation in July, the month former Public Safety Commissioner Walt Monegan says he was fired by Palin.
Palin said Monegan was dismissed after he clashed repeatedly with her over budget issues. But Monegan has said he believes he was fired because he resisted pressure to fire the governor's ex-brother-in-law, State Trooper Mike Wooten.
Palin, who has called Wooten a "rogue trooper" who threatened her family during his divorce from her sister, has denied wrongdoing. She said Monegan continued to lobby lawmakers for projects she opposed.
Palin initially pledged to cooperate with the investigation. But after she became Sen. John McCain's running mate in August, five GOP lawmakers sued to block the investigation. Her allies have argued that the legislative investigation is a Democratic-led witch hunt and that the state Personnel Board should instead lead the inquiry.
The governor's husband, Todd, and several top aides spent three weeks resisting subpoenas issued by the state Senate in September. But after last week's decision by Anchorage Superior Court Judge Peter Michalski to uphold the subpoenas, and with Friday's deadline for the investigation's final report approaching, they agreed to give statements to a special counsel this week.
Todd Palin said in a sworn affidavit released Wednesday night that he never pressured Monegan to fire Wooten.
Todd Palin said his wife was unhappy with Monegan because of "budget issues and failure to fill trooper vacancies."
"Walt Monegan was, to the best of my knowledge, not terminated," Todd Palin said. "He was offered a reassignment [to the post of executive director of the Alcohol Beverage and Control Board], and he resigned rather than accept the reassignment."
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Not a single person, volunteered each time. His rank tells me he was rewarded.
Still waiting for John Sidney to start banging his fist on a podium, shouting, “You can’t handle the truth.“