First, Let me congratulate all you moderators on the excellent work ur doing.... I believe that it takes a lot of dedication to persistently support a cause like this. (assuming u guys r not getting paid for this, of course )

And yeah, its a tough job, because it also needs a well balanced attitude

I second the "Report to moderator" button suggestion.
It would in a way delegate some responsibility on active users to report events like these, (and u can put the monkey on "OTHER USERS OBJECTIONS" if ur asked to justify)

Also, Dont know how this site is hosted, but u could probably run a report at the end of the day (or adhoc) that can filter our messages that use slangs/derogatory words.

And when an individual moderator wants to take some action, he/she could use a generic id for doing that.

To start off, An official policy (doesnt need to be too specific) that can be adapted overtime and modified anytime could help. You dont wanna run into lawsuits where u violate freedom of speech, thought and expression.

bison