FRANKFORT, Ky. (AP) _ Democrat Bruce Lunsford unleashed a TV ad Thursday portraying Republican Sen. Mitch McConnell as the "master" of Washington's insider system, saying the incumbent helps oil companies get tax breaks while receiving millions in campaign donations.

Lunsford's ad says consumers "get the short end of the stick" — namely high gas prices

McConnell campaign manager Justin Brasell countered by attacking Lunsford's business past, saying the Democrat walked away with millions from a nursing home company he ran that sought bankruptcy protection.

The exchange represented an escalation of attacks in Kentucky's Senate race.

Some prominent Democrats have said in recent days that Lunsford needed to go on the offensive against McConnell, a savvy strategist known for setting the tone of campaigns.

Running as an outsider, Lunsford said in the new ad that the way Washington works, "politicians get millions in campaign cash" and special interests get what they want.

"Mitch McConnell is the master of this system," Lunsford said. "It's how Big Oil gets billions in tax breaks, and we get $4 a gallon gas."

McConnell, the Senate's top-ranking Republican, fired the first shot of the fall campaign by running ads tying Lunsford to the state's gas tax. The ads said Lunsford, as a gubernatorial aide years ago, played a role in passing a law resulting in periodic increases in the fuel tax.

McConnell's ads also claim his challenger has personally profited from investing in oil and has sought campaign money from oil interests.

Lunsford deflected the attack with a recent ad pointing to editorials lambasting McConnell's TV spot. Lunsford's campaign said McConnell invested in a mutual fund that includes oil stock, and said gas prices have risen $2.50 per gallon since the Republican started his fourth term.

Brasell, McConnell's campaign manager, responded to the challenger's newest ad Thursday by delving into Lunsford's past as a founder and top executive of Vencor Inc.

Vencor rose to Fortune 500 status but later incurred heavy losses and filed for protection under the Chapter 11 bankruptcy code in 1999. Lunsford blamed the losses on government cuts in medical reimbursement rates as part of the 1997 balanced-budget law. Vencor emerged from bankruptcy in 2001 and was renamed Kindred Healthcare, which has been a successful company.

"Here is how it works in Lunsford's world: you run a nursing home business that takes millions from the federal government," Brasell said. "Then you bankrupt the business but make sure that you walk away with millions."

Brasell also noted that Vencor incurred stiff fines from the government.

Vencor agreed to a settlement with the government that included $104.5 million to resolve allegations the company submitted false claims to Medicare and Medicaid. Vencor admitted no wrongdoing as part of the settlement.

Elaine Chao, McConnell's wife and the current U.S. labor secretary, was a member of Vencor's board of directors for several years.

Lunsford campaign spokesman Cary Stemle said the Vencor-related attacks were a distortion.

Meanwhile, Lunsford's ad also refers to the recent indictment of longtime Sen. Ted Stevens on corruption charges, though the ad doesn't name the Alaska Republican.

The Justice Department accuses Stevens of lying on congressional disclosure documents about more than $250,000 in gifts and home renovations he received from an oil field services contractor.

Lunsford said in the ad that the relationship between politicians and special interests is "how senators get indicted, and Mitch McConnell says nothing."

McConnell, when asked about Stevens before the annual Fancy Farm Picnic in far western Kentucky last weekend, said the Alaskan's case was a matter for the legal process and an issue only in Alaska. McConnell also said recently he was donating $10,000 his campaign received from Stevens' political action committee to a homeless shelter in Louisville. Under Senate GOP conference rules, Stevens stepped down as ranking member of the Senate Commerce Committee and the Appropriations Subcommittee on Defense pending the outcome of his case.