As the head of Wal-Mart Stores Inc.'s U.S. operations, with a compensation package topping $4 million last year, Thomas M. Coughlin dipped into company funds to pay for CDs, beer, an all-terrain vehicle, a customized dog kennel, even a computer as his son's graduation gift -- all the while describing the purchases as routine business expenses, according to a company report released yesterday.

Coughlin misappropriated hundreds of thousands of dollars while serving as Wal-Mart's No. 2 executive by colluding with a loyal group of subordinates, including a former Wal-Mart vice president, Jared Bowen, who says he was fired for blowing the whistle on Coughlin, the report concluded.

The company report says that rather than sniffing out the wrongdoing as he says he did, Bowen actively engaged in the scheme by repeatedly approving or facilitating improper spending by Coughlin and his friends, such as the purchase of $900 worth of duck hunting gear and $1,700 for a computer Coughlin said he needed for a "union project."

Wal-Mart's release of the 25-page report, plus nearly 100 pages of documentation, underscores its resolve to discredit both Coughlin and Bowen, who since being fired by the company have leveled potentially damaging allegations against the Bentonville, Ark.-based retailer. The company has hired former Labor Department chief lawyer Eugene Scalia to defend it against the allegations and has a team of former FBI agents and U.S. attorneys conducting its internal investigation of Coughlin and Bowen.

Coughlin was ousted from the company's board in March over allegations of expense account abuse, and the case has become the subject of a grand jury investigation in Arkansas.

Coughlin maintains he used the company funds to fight unions, in some cases paying union members to identify stores where organizers planned to recruit, a potential violation of federal labor law. Bowen said he was fired in retaliation for reporting on Coughlin's activity, a claim that if proved could undermine Wal-Mart's guarantee that its 1.2 million U.S. employees can complain about any supervisor without fear of retribution.

Lawyers said Bowen's claims are particularly worrisome for Wal-Mart because they are contained in a whistle-blower lawsuit filed under the Sarbanes-Oxley Act. The law extends federal whistle-blower protection to employees of public companies, and, if Bowen wins, it could open the retailer to potentially serious liability, said Charles M. Elson, director of the University of Delaware's corporate governance center.

Mona Williams, a Wal-Mart spokeswoman, denied that Bowen is a whistle-blower and said his lawsuit "can damage both our reputation and the integrity of the Sarbanes-Oxley process." She added, "We are taking it very seriously, and that's one reason we are being so forthcoming with facts uncovered in our investigation."

The documents released yesterday were prepared by Scalia's law firm, Gibson, Dunn & Crutcher LLP, in response to Bowen's complaint with the Labor Department, which handles Sarbanes-Oxley whistle-blower cases.

Coughlin's attorney, William W. Taylor III, said he had not seen the documents and would not comment. But he blasted Wal-Mart's release of the report, saying the retailer has withheld such documents from him for months, handicapping Coughlin's defense.

"Now, suddenly and without any notice to us, Wal-Mart decided that it no longer needed to protect the confidentiality of the documents and made them available for the world," he said in a statement.

According to Wal-Mart's report, Coughlin, a 27-year company veteran, hunting partner of founder Sam Walton and a towering presence in the chain, inhabited a world of bogus expense forms, phony invoices and misappropriated gift cards. These were routinely used to buy mundane products such as charcoal, contact lenses and thermal underwear and extravagant ones such as computers and customized hunting equipment, according to Wal-Mart's report.

In one case, the report said, Coughlin directed a subordinate to buy $2,000 worth of Wal-Mart gift cards, ostensibly to hand out to low-level employees during store visits. Instead, he used them to buy food, beer, wine and hunting supplies, the report said. In another, he asked Mississippi hunting supply company Mossy Oak for an all-terrain vehicle. Wal-Mart funds were used to pay for $8,500 of the cost, with $2,200 covered by Mossy Oak -- a violation of Wal-Mart's strictly enforced ban on gifts from suppliers or potential suppliers, the report said.

In addition to facilitating Coughlin's improper spending, Wal-Mart said, Bowen repeatedly sought bogus reimbursements for himself. He submitted two reimbursements requests for the same trip to California; two requests for the same iPod, purportedly purchased for Coughlin; and three requests for the same rental car.

Bowen's attorney, Steve Kardell, said the duplicate expenses were legitimate mistakes and involved a minimal amount of money for an executive paid more than $250,000 annually. He called the company's firing of Bowen and efforts to undermine him "disingenuous" and said the former vice president had properly reported through company channels when Coughlin asked for 51 gift cards.

The report is Wal-Mart's second effort to fire back at Bowen. Last week, the company disclosed documents it said showed Bowen forged his college transcript to inflate his grade-point average when applying for a corporate job at Wal-Mart.

Wal-Mart said its investigation of Coughlin was triggered not by Bowen, but by another employee who notified the company when Coughlin used a Wal-Mart gift card, apparently intended for store employees, to buy a pair of contact lenses.

Wal-Mart yesterday reiterated that it has found no evidence of a secretive anti-union project, which Coughlin repeatedly described to colleagues when justifying his expenses. The allegation of anti-union activity has prompted the United Food and Commercial Workers union to file a complaint with the National Labor Relations Board. Wal-Mart said that it has requested evidence of such a project but that "none has been provided."

Thomas M. Coughlin was forced from Wal-Mart's board.