Looks like it is a bug. I started going through it last night, and finally finished going through the setting this morning.
Jim is a member of three groups - Lifetime Supporter - FTA Finds and Access to the Pit.
All of them are set to no moderation privilidges.
I think it may have to do with the (no longer supported) password protected forum add on. I will look into it later more when I have more time.