What kind of mental disorders does he suffer from?

It sounds to me like she is just spoiled rotten. The inappropriate dress sounds like he is letting her do whatever she wants...it does not necessarily mean he is getting something sick out of it.

The "high school love" comment is a little creepy, but without knowing more, I have no idea if it is a red flag, or just a dumb way for him to have expressed himself.

I think some dads let themselves get into this "princess" situation--and sometimes it goes to much later ages! It's not sexual, but it is dysfunctional.

I think jerrymichele is right...you are well within your rights to apply some of your own rules here. You don't have to put up with his lax approach.

Family counseling might salvage this situation...but getting him on board could be hard. If that doesn't happen, you might want to talk to a counselor yourself and get some support. I hope this does not have to split up the family...the 12 year old could probably use some balance in her life that she is not getting from her dad. Good luck!!