Abedin, who worked for Clinton when she was secretary of state and is now part of her transition team, is also married to former U.S. Rep. Anthony Weiner, D-N.Y., a mayoral candidate in New York City.
Grassley sent letters Thursday to both the State Department and Teneo Holdings, a firm founded by Doug Band, a former counselor to President Bill Clinton, Politico reported. Abedin, who had been Hillary Clinton's deputy chief of staff, was reclassified as a "special government employee" last year after she had a son, a change that allowed her to work for others.
"It appears that Teneo may have been compensating Ms. Abedin for gathering information from government sources for the purpose of informing investment decisions of her clients -- or in other words, political intelligence," Grassley said.
Hillary Clinton is believed to be considering a presidential run in 2016, making her a continual target for Republicans.
A former state department official told Politico that Teneo has responded to the letter by saying Abedin no longer works for them. The official also said Abedin did not work directly with Teneo clients and was not privy to political intelligence in her government job.
The official said Grassley also overstated Abedin's outside income, which the senator gave as $355,000. He said that was the total earned by both Abedin and her husband, who resigned from Congress after acknowledging sending salacious tweets to several women.
'SNL': 'Anchorman 2' cast, One Direction sing 'Afternoon Delight' [VIDEO]
Exploding whale video goes viral on Internet