The Justice Department reportedly has blocked the FBI from launching a federal probe into accusations involving Senate Majority Leader Harry Reid, D-Nev., and Sen. Mike Lee, R-Utah, leaving agents to work with local prosecutors to examine the evidence on the side.

The Washington Times reported Friday that two local Utah prosecutors, one Democrat and one Republican, are now working on a wide-ranging corruption investigation. As part of that, they apparently uncovered accusations of wrongdoing by the two U.S. senators.

But the Justice Department reportedly blocked FBI agents from using a federal grand jury and subpoenas to test whether they or other officials committed any violations.

Both local prosecutors are speaking out, saying the claims should at least be looked into. Their offices are doing so, with some assistance from FBI agents.

"Based upon what we know today, we were surprised that the DOJ ran away," Davis County prosecutor Troy Rawlings reportedly said.

Rawlings, a Republican, stressed it would be "unfair" to describe this as an investigation of Reid and Lee at this point. But he said "we are not going to ignore the scraps of evidence coming in about them."

Sim Gill, Salt Lake County chief prosecutor and a Democrat, also reportedly said the "very serious allegations" should be examined.

The accusations stem in part from indicted businessman Jeremy Johnson, who reportedly claims he was asked to route hundreds of thousands of dollars in contributions and payments to one of Reid's associates, in the hopes Reid would intervene on both a federal fraud lawsuit against him and on legislation allowing Internet poker. Reid never intervened on the lawsuit, but did back off his opposition to Internet poker.

Reid spokesman Adam Jentleson, though, denied the allegations and said Reid always conducts fundraising in compliance with the law.

"Mr. Johnson is a desperate individual who's been indicted on over 80 counts. His allegations are false and the flailings of a desperate man," he told the newspaper.

Jentleson told FoxNews.com that the local prosecutors' complaints at this stage seem "like a total publicity stunt."

Both The Washington Times and ABC News reported on the accusations.

As for Lee, the questions reportedly involve Lee's sale of his million-dollar Utah home, apparently to a campaign contributor, for just $720,000. The home was sold in a short sale, leaving the mortgage bank to absorb much of the losses, and investigators reportedly want to know whether Lee provided accurate information about his personal finances.

A spokesman for Lee said the transaction was "aboveboard."

Representatives with Lee and the Justice Department have not returned requests for comment from FoxNews.com.

FoxNews.com's Judson Berger contributed to this report.