I am almost speechless, but apparently not because I am replying. I have never heard of such a rip off and non-disclosure of information in this industry and I have heard many stories. I know for a fact that there are many ethical and information transparent SEO/SEM companies/consultants that will give you as much, and even more, information than you want to know on the progress of your campaigns, as well manually create other activity reports. Please don't let this guy tarnish the industry in your company's eyes.

AdWords, Yahoo! Search Marketing , & MSN adCenter do have accounting and billing receipts that can be printed easily. I would not normally say this and not to be litigious, but your company should consider suing this guy so he doesn't just keep taking people's money and deceiving them into thinking he is doing SEO and SEM.
Many clients do have unrealistic expectations in the beginning (especially as far as SEO is concerned), but you companies requests were not unreasonable at all and very much with the norm. For SEM it should be a little more controllable. Decide how much a customer is worth to the company and continually try to lower the cost per acquisition, increase the ROI, or some other goal. Traffic is just a byproduct.

He may have even outsourced the ppc management or started it and never even logged in again. There is so much to know to even ask the right questions, a member of your team should get as educated as possible to ask those questions in the beginning before going with another company/consultant.

As with any job, Internet Marketing SEO/SEM isn't voodoo magic. It is work and it takes ongoing hours of time. Expertise definitely plays a part and separates the people who are going to waste your money verses make you/your company lots and lots of money. Sounds like this guy had barely any experience, or just flat didn't spend the time doing the work, but he must have been a good salesman to take your company for tens of 1000s of dollars.

If both parties understand that SEO/SEM is work, the SEO/SEM should not fear that he/she reveal their bag of tricks. The nature of the work should be defined in specifics as well as goals, accountability, and reporting.