The inquiry is described as preliminary, according to the source. It was not clear whether authorities were looking at Democratic New York Gov. Andrew Cuomo himself or members of his administration.
A senior adviser to the governor said that the administration had been cooperating with the Justice Department and would continue to do so.
“As we publicly said, DOJ has been looking into this for months. We have been cooperating with them and we will continue to,” said Rich Azzopardi, senior adviser to the governor.
The US Attorney’s Office for the Eastern District of New York declined to comment to CNN, as did the FBI in New York.
The Albany Times Union was the first to report on the inquiry.
This is a breaking story and will be updated.