That's messed up. Your boss should be shielding you from the jerk's behavior, however beloved he seems to be by their superiors. If you boss tries to address it with his peer the jerk, but it doesn't work, then it is your boss's unfortunate responsibility to bring it up with their superiors. I understand it's scary. Your manager needs to man up. That's a responsibility that comes with the job.

Really you should be a manager, not that a*!@#$%.