Former teachers and principals packed into a court room on Wednesday to hear ex Deputy Secretary for Education, Mr Fraser confess to secretly funnelling $1 million to the company that won the Ultranet contract.( This was after he tried to get out of testifying in public.
Mr Fraser said he arranged a $1 million payment to Ultranet provider CSG, via a recruitment firm, to "shroud that transaction from scrutiny".
Without the extra money the project may not have gone ahead, he said
"It was my only option," he said. "It was a grave error in my judgement and I was acting unprofessionally."
He said he was shocked to discover that the recruitment firm pocketed $60,000 for simply moving the money to CSG. "It was a lot of money for very little work," he said.
Mr Fraser is at the centre of the Ultranet scandal, which has cost Victorian taxpayers up to an estimated $240 million.
He had a whirlwind rise from principal of Glen Waverley Secondary College to deputy secretary and has been accused by former colleagues of breaking "every f---ing rule in the book".
In 2012, he took a senior job with CSG, but he denied purchasing shares in the company.
Mr Fraser told the inquiry that he wiped his computer when he left the department because he did not think its contents would be "of any interest".
The Independent Broad-Based Anti-Corruption Commission is investigating how contracts were awarded and tendered for the botched Ultranet IT project for schools, and whether the taxpayer-funded project was abused by officials who took overseas trips, promotions and were involved in alleged insider trading.
The IT project was axed by in 2013, after costs blew out and it was plagued by technical issues. ( Schools wasted hundreds of hours trying to make Ultranet work but in the end it was a miserable failure.
In a statement tendered to IBAC, department secretary Gill Callister said an atmosphere of "fear and bullying" had prevented people from speaking out. She said a group of senior staff breached procurement rules for their own benefit.
"In the Ultranet tender, a series of red flags were raised which should have resulted in the termination of the project, or, at least, a change in direction," she said.
It is the second IBAC investigation that Ms Callister has had to respond to since taking the top job in 2015.
She said the department had launched a new confidential whistleblower service, tougher requirements to prevent inducements that could influence decisions and was implementing an executive rotation program to prevent "unhealthy networks from forming". It is also auditing 2000 employees' declarations of interest to look for conflicts of interest.
The inquiry claimed its first scalp on Tuesday, with the department confirming that regional director Matt Dunkley was suspended and removed for DETs integrity committee, which was set up in the wake of IBAC's first investigation.
IBAC will release its public report for Operation Dunham later this year. A separate public report for Operation Ord – which focused on the misuse of education department funds through so-called "banker schools" – will be released in the next six weeks.