Education Department officials corrupted the tender process for a disastrous school IT project, wasting up to $240 million in taxpayers' money, Victoria's anti-corruption watchdog has concluded.
They could now faces criminal charges following a lengthy investigation by the Independent Broad-Based Anti-Corruption Commission.
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Victoria's Ultranet fiasco
Here's what the $180m Ultranet IT project for Victorian Government schools was meant to do.
The Ultranet project promised to deliver an online platform that connected teachers, parents and students, but was plagued by technical issues and rarely used after its rollout by the former state Labor government in 2010.
In a long-awaited report tabled in state parliament on Friday, IBAC found that department officials purchased shares in CSG – the company awarded the Ultranet project – influenced the tender process for the multi-million dollar project and received lavish and inappropriate hospitality and travel gifts.
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"The willingness of some senior leaders in the Department to deceive has resulted in the waste of millions of dollars of public money," the report said.
It follows revelations by Fairfax Media in 2014 that four senior senior education department officials bought shares or took jobs with CSG.
Operation Dunham, an IBAC investigation into the alleged misconduct, also identified insider trading, stating in its final report that former regional director John Allman purchased shares in CSG knowing that it would likely win the lucrative contract.
His colleague, former regional director Ron Lake, bought $100,000 in CSG shares while on the Ultranet board. Former regional director Wayne Craig and his wife purchased 6000 CSG shares after the company won the contract.
"The behaviour suggests that at least some used confidential information to which they were exposed in the course of their work for private gain," the report said.
The corruption watchdog found the man who spearheaded the Ultranet project, former deputy secretary Darrell Fraser, used $1 million of department money to "corruptly inject funds into CSG to ensure it had sufficient cash flow to properly deliver the Ultranet project", IBAC found.
In 2011, Mr Fraser resigned as deputy secretary and took up a senior job with CSG.
The watchdog heard that despite repeated warnings from consultants and probity officers that the CSG bid was high risk, the contract went ahead.
"IBAC found decisions were made that were contrary to proper procurement process – in particular, the unreasoned and inexplicable decision to give singular preference to CSG, despite serious concerns about its commercial credentials in the relevant area.
Ultranet was launched in 2010 at an event which became known as "The Big Day Out" and cost a staggering $1.4 million.
"The expenditure on the Big Day Out was in anyone's view excessive," IBAC said.
A video of the event played during the public hearings showed singers and dancers performing to a remixed version of Madonna's Material Girl: "We are living in a virtual world and I am an Ultranet girl".
The investigation heard that Mr Fraser was a bully when he was challenged.
"Evidence provided during Operation Dunham suggests overt aggression was not the only unprofessional behaviour displayed by Mr Fraser, as he effectively sidelined those with whom he disagreed from decision making roles," the report said.
The commission was told that a "boozy, blokey culture" permeated the Department.
Education Department secretary Gill Callister said that the behaviour exposed by IBAC was "completely unacceptable".
"Many people within the Department and our school communities will feel greatly let down by the people they were entitled to trust," she said.
She said the Department was delivering sweeping reforms to prevent this behaviour from occurring again. Senior executives implicated in the scandal have been either sacked or resigned, she said.
IBAC is seeking advice from the Office of Public Prosecutions about whether criminal charges can be pursued.