Attorney General Michael Mukasey said there were concerns of favoritism in the 18-month deal made last fall in which the Ashcroft Group is to receive $28 million and $52 million, the New York Times reported.

The contract involves a third-party -- the Ashcroft Group -- monitoring Zimmer Holdings, a medical supply company in Indiana, as part of an out-of-court settlement reached in New Jersey.

New Jersey's top prosecutor, U.S. Attorney Christopher Christie, struck the deal without outside bidding. Christie worked for Ashcroft between 2002 and 2005, which prompted the inquiry, the report said.

Justice Department officials told the Times the internal inquiry by the Criminal Division began several weeks ago and no public announcement was made.