Late yesterday, ABC News and the Washington Times both reported that Utah prosecutors have been working with the FBI on allegations of corruption involving two US Senators — who at first blush could not be more opposite. Majority Leader Harry Reid and Senator Mike Lee have almost nothing in common politically, but may be connected to corruption tracked in Utah involving the online-gambling industry. ABC’s Brian Ross spoke to the two Utah prosecutors — one Republican, one Democrat — who want the Department of Justice to open a broader investigation of Reid and Lee:

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Two local prosecutors in Utah say a corruption investigation looking at state politicians and online gambling interests has yielded evidence that could implicate Senate Majority Leader Harry Reid, D-Nevada, and Senator Mike Lee, R-Utah.

The two district attorneys – one Democrat and one Republican – already working with a team of FBI agents, are urging federal prosecutors to pick up the case and investigate – something the Department of Justice has thus far declined to do.

The Utah officials say the evidence relates to suspect campaign contributions and other financial transactions.

Reid, a liberal Democrat, and Lee, a rising star in Republican politics, could not be more opposite politically but both have ties to the on-line poker world, the prosecutors say.

This isn’t the first time a connection between Reid and Lee has arisen, John Solomon reports at the Washington Times, and it concerned Democrats at the time:

The investigative efforts have been further complicated by the fact that Mr. Reid worked to get Mr. Lee’s chief counsel, David Barlow, confirmed in 2011 as the U.S. attorney in Salt Lake City. That action — a Democratic Senate leader letting a Republican be named to a key prosecutor’s position in the Obama administration — raised many eyebrows and angered some Democrats.

Subsequently, the entire office of federal prosecutors in Utah was forced to recuse itself from the corruption case after questions surfaced about a conflict of interest involving one prosecutor and a subject of the probe. After the recusal, state prosecutors secured a court order transferring the federal evidence gathered up to that point to their possession.

The process has left FBI agents in the unusual position of trying to help two local prosecutors make a case in state court without the ability to use the federal court system to determine whether accusations against two powerful members of Congress are true.

That’s not the only “unusual position” that the FBI has had to take in this case. Normally, these kinds of allegations would go to a federal grand jury for further development, quarterbacked by the DoJ’s public integrity section. Instead, the DoJ has refused to do anything with the case:

The probe, conducted by one Republican and one Democratic state prosecutor in Utah, has received accusations from an indicted businessman and political donor, interviewed other witnesses and gathered preliminary evidence such as financial records, Congressional Record statements and photographs that corroborate some aspects of the accusations, officials have told The Washington Times and ABC News.

But the Justice Department’s public integrity section — which normally handles corruption cases involving elected figures — rejected FBI agents’ bid to use a federal grand jury and subpoenas to determine whether the accusations are true and whether any federal crimes were committed by state and federal officials.

The FBI is “frustrated” by the lack of cooperation at Justice in the probe:

People familiar with the probe said both FBI agents and local investigators have been frustrated for months by the Justice Department’s inaction on the initial accusations and evidence against the two senators, and those concerns were recently elevated to FBI headquarters.

The special agent in charge of the Utah office was summoned earlier this month to Washington to meet with senior FBI officials, and the bureau’s Utah office has been instructed that the FBI agents working the case may only assist in the state probe and cannot pursue federal criminal investigative leads — unless Justice finally approves a corruption probe.

The frustrations have prompted discussions of seeking a special prosecutor who would bypass the Justice Department and U.S. attorney’s office and evaluate the evidence independently. …

“But in this case, DOJ risks creating the perception of a cover-up rather than let agents use the normal tools and follow the evidence wherever it leads — Republican, Democrat, Senate or not,” the senior FBI official said.

The prosecutors have evidence that both Senators conducted pay-for-play efforts with donors and fundraisers, apparently in connection with online gambling interests, whose lobbyists are currently making a big push on Capitol Hill to legalize the industry in the US. Reid flipped his position on that and even introduced legislation to legalize online poker, but it didn’t go far, and the probe found evidence in a wiretap that Reid might have been paid off to do that. Lee’s issues deal with the sale of his home to a federal contractor and campaign contributor at a big loss, which his bank ended up absorbing.

Both Reid and Lee deny any wrongdoing, and the public-integrity section has had its issues with overzealous prosecution in the past, most notably with Ted Stevens. However, if the DoJ refuses to take any action when state prosecutors and its own FBI says a case needs more investigation, then we may not bother having a public-integrity section at the DoJ at all.