Uf, you remind me of a situation I had at a voluntary job… in case you want to skip the story, let me begin by the conclusion:
DON’T do anything. Watch what’s going on as if it was a movie, take note of stuff, back up Steph if she ever finds out what a bitch Ally is but DON’T try to tell her. If Steph ever asks “why didn’t you tell me?” say “because I didn’t think it would help.”
M was an asshole. He’s one of those assholes who are very good at kissing ass, though… he kissed ass with such enthusiasm that if you were his superior and weren’t careful you’d find his tongue in your stomach.
I first got him as my junior. Myself and another person (S) spent many hours training him, patting his hand when things went wrong, comforting him when his first project got delayed and we could not tell him why.
Then the “why” became obvious: we went to version 2.0 of the stuff we’d been using, at which point there was a general cleanup of writers. There had been a lot of people who were writers but hadn’t really been doing a lot, so anybody who wasn’t an “editor” or higher except S and myself (who’d been part of the secret project to move to 2.0) had to reapply. M managed to convince the boss, J, to let him skip the reapplication; in a couple months, during which S left in anger and I spent a lot of time polising details and smacking bugs, M jumped over my head. You know those guys who treat life like a ladder? Well, now that he was over me, all I saw of him was the sole of his boots, which I ignored pointedly; I don’t do that licking thing.
There were a lot of complaints to J about M, but J adscribed them to jealousy; several people left when they saw that it didn’t matter who was right… if you went up against M, you’d lost already. One of M’s tactics was to take something someone had finished 90%, while that someone was absent, finish that 10% (often changing the whole spirit of the thing; often you could see which part was from whom) and present it to J as if it was all M’s: J always ate it hook, line and sink. Heck, he ate the pole and the fisherman, if you weren’t careful.
Then one day, I was* finally * officially made an editor, supervising 3 writers; I’d been editing pretty much since I’d joined the writers’ team, but because English is not my native language I’d not been considered for an editor position. One of them publised his first piece; then the second one; then when the third was about ready, I got there for our meeting and found my writer with M “oh, I thought I’d give you guys a hand”. Since M was a senior at this point, I just bowed out.
This third project gets published. Within hours, there is an email to J and myself from N, whom we could call the “discipline manager.” She’d received a report about me being extremely lenient on writers who happened to be friends of mine; looking at this project, she’d found a lot of glaring errors. My response and J’s were pretty much simultaneous: he asked for more details and said he’d though M had done the editing; I apologized for any errors I’d mistakenly let through, pointed out that the project had had two editors (there was a post from the author in out message board indicating who had edited which parts, I referenced this post in my letter), and asked for further details on errors found.
The errors? All on the parts M had edited. Honey, if I’d been cleaner I would’a been in an ad for bleach.
And the wonderful, wonderful thing? J had a sort’a revelation. Even though he’d given me the editing of that project himself, he’d been convinced (because M had said so) that it was M who’d done it completely. Turns out that not only had M done a pretty bad job, but he’d also, ah, misled J about “how much” of the editing was M’s job. So J asked me “this work, who did it?” “M and F, M did this and F did this, this and this” “this other?” “mostly D, all M did was change two lines” and so forth.
It didn’t lead to M’s getting the hell out of Tucson right there, but it meant that J started double checking any info from M… finally. And eventually, M got the hell out of Tucson. But all the people who’d made a ruckus when they came back from a weekend camping to find their stuff gutted by Mr M? They ended up as so much roadkill 
sorry for not getting back sooner- it’s the weekend and I won’t see either one fo them til Monday.