The husband of former senator Mary Jo Fisher has alleged senior police mishandled his wife's shoplifting case in 2011.
John Crosby wrote to the South Australian Government and state's Police Commissioner last November alleging an abuse of power.
Ms Fisher was acquitted of shoplifting but found guilty of assault and released without a conviction over an incident at an Adelaide eastern suburbs supermarket.
Mr Crosby said police prosecutors made three offers to his wife of a plea deal to avoid trial, but were overruled by senior police.
SA Attorney-General John Rau said Mr Crosby's complaint had now been referred to the Police Ombudsman, an independent statutory authority.
Mr Crosby and Ms Fisher declined requests for an interview by the ABC, saying they did not want to interfere with the Ombudsman's process.
But a federal Liberal MP Jamie Briggs welcomed the investigation, saying he shared the concerns raised by Mr Crosby that the pursuit of the former Liberal senator was "vicious".
"It seemed to me that there was a large amount of taxpayers' money being spent on something which seemed to be of a minor nature, of someone in the public spotlight," he said.