[kosma]

It takes just one bad apple to spoil the entire team.

I've been in this situation three times. Reporting that your teammate is dragging the entire project down is a horrible feeling - but it's the only responsible thing to do. If you don't, you buy one person's peace of mind at the cost of the whole team's well-being.

PS. Dr Glover was right: nice guys are not nice. They just try to cover their asses and stay quiet.