I'd be very very tempted to blow it all out into the open.
Yeah, but it's all really minor. It takes years of exposure to realize what she's doing.
For instance, I asked her today about the status of a project, and she admitted that she was in contact with X agency. I asked who was our point of contact there, and her response was "I will be working with Jeff and Lucy".
Notice the pronoun--even though I'm the program manager, I'm not a participant in her coordination with external agencies. She's marking her territory.
Which means I will be forced to reply, "That's great! Please cc me on your correspondence with them so we'll all be up to speed on what's going on." This makes me look like a bitch (because of course she'd cc me! Even though she never ever does) and a micro-manager.
Regardless, she won't cc me on her conversations with other agencies. I never know what she's doing, if anything, and that's on purpose. If nobody knows what she's doing, she can say whatever she likes about the status of her work and nobody can question it.