OAKLAND, Calif.—Oakland's city auditor says two council members broke city law by interfering with the bidding process for a major construction project.

Courtney Ruby made the allegations against long-time council members Desley Brooks and Larry Reid in a report released on Thursday.

Ruby said Brooks and Reid told the city's redevelopment staff to seek a bid from a particular construction company for a roughly $2 million contract involving the redevelopment of the former Oakland Army Base.

The councilmembers' preferred company did not get the deal.

Reid called the allegations against him "a flat-out lie." Brooks said she raised concerns at a public meeting that staff had not opened the contract to competitive bidding, but did not interfere.

Ruby said she intends to turn her findings over to the Alameda County District Attorney's Office and the FBI.