Keeper of the keys
His trick
The middle-management loon demands that his direct reports each disclose their passwords to him. When confronted with policy to the contrary, he insists that this is necessary to ensure access to work files if an employee were to leave.
Your treat
Stage an intervention through mock misbehavior of one of his direct reports (later to be dismissed as spyware activity). Ensure that HR makes a public point of including him as a suspect in the malfeasance because of his access to the accused's log-on account. If the opportunity presents itself, arrange an interview with "The Bobs."