Thanks to everyone for your ideas, suggestions, support, words of wisdom, and plain talk of hard lessons to learn. Rather than get involved in a power struggle via email, last night I decided to handle this with a phone call directly to the employee that originated the demand. Turns out he'd rather I deal with the db to get it past the last beta test and then pass it off to an outside programmer. So, he never asked again for the password just asked what he could do to help out with data, ideas, and testing. He confessed that he'd written the email in anger having just been chewed out by his boss and apologized!
Now that I have breathing room, I'm sending out a specific engagement for this beta. I'll post the details @ShawnSlavin for your future plagiarism, and anyone else too. Thank you all again, this group is truly the greatest.