The ad was funded by the Texas businessman behind the 2004 "Swift Boat Veterans for Truth" attacks on Democratic presidential candidate John Kerry, the Star-Ledger of Newark reported.
Some groups have urged Republican candidate Thomas Kean to pull the commercial. But his campaign says that, while he hates the ad, he has no control over whether it airs and cannot even ask to have it pulled under campaign finance laws.
"The Swift Boat ad distortion and now this distortion -- that Italian-Americans are involved in organized crime, and so is Menendez, who is not even Italian -- it's hurtful," said Robert Bianchi, a lawyer and national vice president of the Commission for Social Justice, Order Sons of Italy of America.
Menendez, a Democrat appointed to the Senate seat by Gov. Jon Corzine, and Kean, son of a popular former governor, are locked in a tight race. Most polls give Menendez a very narrow lead.