The criminal referral from Grassley and Graham appears to be the first that's tied to any of the congressional committees investigating Russian election meddling.
"I don't take lightly making a referral for criminal investigation. But, as I would with any credible evidence of a crime unearthed in the course of our investigations, I feel obliged to pass that information along to the Justice Department for appropriate review," Grassley, an Iowa Republican, said in the statement Friday.
The Justice Department and attorneys for Steele did not immediately respond to CNN's request for comment.
A criminal referral is a request to DOJ for further investigation, and is not alleging that a crime occurred.
The criminal referral is an escalation by Republicans struggling over the credibility of the dossier written by Steele about President Donald Trump and Russia — and by extension the FBI and special counsel investigations into possible collusion between Russian officials and the Trump team.
Republicans have accused the FBI of basing its investigation into the Trump campaign and Russia on claims from the dossier, which was paid for in part by the Hillary Clinton campaign and the Democratic National Committee. However, CNN's reporting shows a number of pieces of intelligence separate from the dossier raised concerns among US national security officials and propelled an investigation.
Democrats dismissed the criminal referral as another political attempt to discredit the Russia investigations.
Sen. Dianne Feinstein of California, the top Democrat on the Judiciary Committee, said she and her Democratic colleagues were not consulted on the referral.
"I think this referral is unfortunate as it's clearly another effort to deflect attention from what should be the committee's top priority: determining whether there was collusion between the Trump campaign and Russia to influence the election and whether there was subsequent obstruction of justice," Feinstein said in a statement. "I'll continue to stand strong against any efforts to undermine Special Counsel Mueller's investigation, as well as the ongoing congressional investigations. Getting to the bottom of what happened remains a top priority for me, as I hope it does for everyone on the Judiciary Committee."
"Given all that we've learned through the course of the investigations, it's telling that THIS is what Republicans are now choosing to pursue," tweeted Sen. Patrick Leahy, a Vermont Democrat.
The Judiciary Committee probe is one of three congressional investigations into Russian interference into the US election, and is separate from Robert Mueller's probe.
In Grassley's statement, he highlighted inconsistencies that "seem to correspond to partisan political interests" and said he feels "obliged to pass that information along to the Justice Department for appropriate review."
Graham and Grassley did not provide evidence to back up their referral, but said they had sent Deputy Attorney General Rod Rosenstein and FBI Director Christopher Wray a classified attachment to accompany their referral.
The dossier, which began as an opposition research effort and became publicly known in early 2017, details Russian interference in the 2016 election and includes allegations that Russian operatives claim to have compromising personal and financial information about Trump.
The broad assertion of the dossier findings -- that Russia waged a campaign to interfere in the election -- is now accepted as fact by the US intelligence community. US officials have corroborated some aspects of the dossier, although its most salacious allegations have not been corroborated by the intelligence community or CNN.
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