Updated

New York Democratic Rep. Mike McMahon fired his communications director Friday for providing a reporter with a list of his Republican challenger's "Jewish money" donors, igniting a nationwide outrage.

In an effort to fault challenger Mike Grimm for accepting out-of-district contributions, McMahon's spokeswoman, Jennifer Nelson, provided a reporter from the New York Observer on Thursday with a list of "people in Florida and Manhattan, retirees" that bore the title, "Grimm's Jewish Money, Q2."

Grimm is challenging McMahon, a first-term incumbent, for the district seat representing the New York City borough of Staten Island and parts of Brooklyn.

"It is so outrageous, so disturbing, that this is coming from a U.S. congressman's office," Grimm, a retired FBI agent who served in the Marines, told FoxNews.com. "It's just so offensive to me -- I spent most of my adult life fighting for this country to eradicate this behavior."

"It's just disgusting."

The firestorm began on Thursday when Nelson gave the list of Grimm's donors to the Observer.

"Where is Grimm's money coming from," she is quoted as telling the Observer. "There is a lot of Jewish money, a lot of money from people in Florida and Manhattan, retirees."

Nelson told the Observer that the list was compiled by the McMahon campaign's finance director, who she noted was Jewish.

Grimm, in an interview with FoxNews.com, said he received calls and e-mails of support from outraged people across the country -- and from his donors who were named in list compiled by his opponent.

"People want answers, they want to know how this could happen," Grimm said. "My donors deserve answers. They are extremely offended to be put on a list segregated based on their religion."

The Anti-Defamation League said in a statement to FoxNews.com:

"The creation of a list by Congressman Mike McMahon's campaign of his opponent's Jewish donors is an appeal to religious, racial or ethnic bias which has no place in political campaigns. The list trades on age-old stereotypes about Jews and money and treats Jews as separate from other constituents.

"It is offensive, unacceptable and requires an immediate apology."

On Friday, McMahon tried to put out the growing firestorm by firing Nelson and releasing this statement:

"These comments were entirely inappropriate and there is no place for this kind of behavior. I was outraged by these unfortunate remarks, which were unauthorized and are in no way indicative of my beliefs or of my campaign.

"I am proud to represent an incredibly diverse community and to enjoy an incredibly diverse base of support. Any comments that could serve to divide our community along religious or ethnic lines have no place in our community or my campaign. I sincerely apologize for her comments, and as she has since been terminated from our campaign, there will be no such incidents in the future."

But Grimm said the apology wasn't enough.

"It's not about a comment, it's the fact that you segregated donors based on religion to garner anti-Semitic support against the candidate Michael Grimm," he said. "This is not about words, this is about action. There is no way that this list was compiled without a lot of people involved."

Republican Jewish Coalition Executive Director Matthew Brooks demanded to know who else was involved in creating the list.

"In more than 25 years in politics I have never seen anything more despicable and offensive than this. This raises serious questions about the whole campaign, from the finance and communications teams to Congressman McMahon himself.

"It is appalling to see such anti-Jewish stereotypes coming from the campaign of a congressman who describes himself as a mainstream, centrist Democrat," Brooks added. "I don't think this is something that should be swept under the rug. Seeing such bigotry from a sitting congressman's campaign is deeply troubling."

McMahon's office did not reply to questions concerning whether anyone else in the campaign was involved in compiling the list.

Said Grimm: "This is not conduct that can be swept under the rug. My donors are proud Americans and to categorize them, to segregate them based on their religion -- it's just deplorable."