A friend has a situation. A co-worker repeatedly said stuff in front of clients that are complete no-goes insulting the clients and disqualifying other colleagues the clients depend on. My friend works closely with this colleague and they normally act as a team of two so there are no other witnesses. How can he act to protect the company from damage done by this colleague without taking damage himself?
I think 'denounce' might be a bit strong. Your friend should start by asking his colleague if he can provide some 1:1 feedback (guidelines here aren't bad, key is to be specific about behaviors: <a href="http://www.dummies.com/how-to/content/giving-constructive-feedback.html" rel="nofollow">http://www.dummies.com/how-to/content/giving-constructive-fe...</a>), and if nothing changes he should voice his concern to his manager.
Your friend shouldn't be looking at denouncing the issue, but at changing the behavior. He should be looking at how to present changing behavior in a way that will appeal to his co-worker. You can have him read Getting to Yes or How to Win Friends and Influence People