Missouri Sen. Claire McCaskill’s husband used the U.S. Senate Dining Room to cut business deals selling tax credits tied to stimulus money, a whistle-blowing executive inside his company alleged on an audio recording exclusively obtained by The Daily Caller.

“The thing that irritated me about this was he [McCaskill’s husband Joseph Shepard] entertained these outside investors in the Senate Dining Room,” the whistle-blower said. “That’s where he closed the deal.”

The whistle-blower, Craig Woods, was a longtime high-ranking official within Shepard’s business empire, serving first as chief financial officer and then as vice president and chief underwriter for Missouri Equity Investors LLC and JA Shepard Companies.

His LinkedIn page indicates he left the company in January 2011, a few months before debriefing a Republican operative who made the recording.

According to the McCaskill campaign, Woods pled guilty in the 1990s in two different cases of felony larceny and spent some time in prison after that.

The campaign also said that Woods lied to McCaskill’s husband about his past on his job application, and submitted a resume detailing “jobs” he held when he was actually in prison.

“Craig Woods is a twice-convicted felon and a disgruntled former employee who lied repeatedly to Claire’s husband about his criminal past of fraud and embezzlement,” McCaskill spokeswoman Caitlin Legacki said in an email to TheDC in response to the allegations. “There is absolutely no merit to these claims. It is shocking that Todd Akin would pin the hopes of his campaign on a twice-convicted felon and a proven liar, but I guess Todd Akin is incredibly desperate at this point. This is a despicable new low, especially for Todd Akin, and he should be ashamed of himself.”

Several Republican sources, including those who conducted the interview, confirmed the identity of the whistle-blower and the details surrounding their meeting. TheDC is protecting the identity of those GOP sources because they were not authorized to speak on the record. TheDC has also disguised the voice of the lone GOP operative whose voice is heard on the recording.

“He [McCaskill’s husband] did four projects — these were rural development deals where he came in and stole from a guy and he did the federal credits and he got Enterprise Bank to invest in those four deals and those have been really iffy,” Woods said on the tape.

Woods said those four projects — housing developments — were “all here in Missouri.” He explained how Shepard brokered deals with investors who counted on high returns in the form of federal and state tax credits that came with these projects. In return for the deals, Woods said, the investors gave Shepard cash he could use elsewhere in his business.

“The reason these [specific projects] were so attractive to him, the reason he wanted to do them, was they got ARRA funds, American Recovery and Reinvestment Act funds,” Woods said, referring to how some programs were tied to President Barack Obama’s 2009 stimulus package.

Woods said one such project, in Clinton, Missouri, got “$5.5 million in stimulus funds. They didn’t have to borrow a dollar.”

Woods said Shepard “bundle[d]” that stimulus-funded project with two other projects that didn’t get stimulus money in Lee’s Summit, Missouri, and Hannibal, Missouri, and took the tax credits from all three to an investor in “the Baltimore-DC area.” Woods added the the “free cash” from the stimulus-funded project packaged with the other two projects was a more “attractive” tax credit deal for investors than three separate deals in which the tax credits from each project were sold separately.

Shephard, Woods alleged, used the Senate Dining Room as his venue to close this tax credit investment deal. “He just thought that was fantastic,” Woods said. “He could take them to the Senate Dining Room and entertain them.”

“I’ve never been there, I don’t know if you have,” Woods added, in his interview with the GOP operatives. “I assume it’s a really nice place. But if nothing else, they’ve gotta be impressed because not everyone can walk in. You can’t just sign the check.”

A GOP operative interrupted Woods during the interview: “Does [Sen.] Claire [McCaskill] have an understanding of this?”

“Oh, hell yes,” Woods responded. “He [Shepard] doesn’t do anything — well, let me put it this way — he doesn’t do anything without Claire understanding it.”

“Sometimes he does it even if she says ‘I don’t want you to.’ Which — she could have been, in a prior life, a merchant marine. You know, she can cuss with the best of them, chew your ass. But yeah, she’s aware of everything he does.”

The GOP operative doing the interview then asked Woods whether there’s a “benefit to him [Shepard] doing all this with her being in the US Senate,” other than the fact that he “can take these guys to dinner.”

Woods replied: “I think it opens more doors for him.”

This audio release comes on the heels of the Associated Press discovering that McCaskill’s husband’s businesses have “received $40 million in government subsidies.”

McCaskill’s senate race opponent, Republican Rep. Todd Akin, cut an ad bashing McCaskill for her husband’s businesses after that article was published, calling her “corrupt.”

Akin’s campaign suffered dramatically after his “legitimate rape” incident earlier this season, right after he won the GOP primary, but has recovered somewhat as Sen. Jim DeMint’s PAC — the Senate Conservatives Fund — threw its weight behind him.

Former Arkansas Gov. Mike Huckabee and former House Speaker Newt Gingrich have remained supportive of Akin as well, but the National Republican Senatorial Committee and other other GOP establishment groups have avoided weighing into the race on Akin’s behalf after the scandal.

Woods was unreachable for comment, despite TheDC’s efforts to contact him. McCaskill’s senate office spokesman Drew Pusateri told TheDC that theDC’s question was a “campaign-relat ed request” and forwarded TheDC to the senator’s re-election campaign for comment. The campaign has not immediately responded to TheDC’s request.

UPDATE, 10:17 p.m.:

After Thursday evening’s debate between McCaskill and Akin, Dana Loesch, a conservative media personality, confronted the senator about the allegation.

McCaskill responded: “This is Dana Loesch, who’s working really hard for my opponent.” McCaskill accused Loesch of being a “campaign operative” and said Woods, the whistle-blower, is a “felon.”

“We’ll be happy to give you an interview, when this is over, about his felony record, and how he hid that from my husband,” McCaskill said. “He’s been convicted twice and in prison for embezzlement and lied about it. He stole hundreds of thousands of dollars from two different companies he worked for.”

When asked if she denied Woods’ allegations, McCaskill said: “Absolutely. What a ridiculous thing to say.”

McCaskill in April spoke about the importance of protecting whistle-blowers.

“Whistle-blowers who raise the alarm about waste, fraud, and abuse should be commended-not punished,” McCaskill said, according to a press release her office sent out on April 26. “Whistle-blowers are the unsung heroes of our fight to root out inappropriate and sometimes illegal behavior in government. This is a good step toward ensuring we’re protecting them from being punished for their work to protect taxpayer dollars.”

Watch McCaskill respond to the allegations:

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