IBAC Can Now Follow the Money Into Your Business

On 24 September 2026, on the final sitting day of the current Parliament, Victoria passed laws that allow its anti-corruption commission to follow public money into private businesses. If your organisation delivers work funded by the Victorian Government, directly or several contracts down the chain, you are now within reach of IBAC in a way you were not a fortnight ago.

Most commentary so far has focused on politicians and public servants. After more than three decades of investigative work, including years inside government integrity environments, I think the bigger story is what this means for contractors, subcontractors, suppliers and consultants. Many of them do not yet realise the ground has shifted.

What has changed

IBAC can now investigate non-government entities that benefit from public funding, not just public bodies and public officers. Before these reforms, its jurisdiction largely stopped at the edge of government. Once public money moved into a chain of private companies, the trail often went cold.

The mechanism is a new category called an associated entity. It is deliberately broad and can capture:

• contracted service providers and subcontractors
• agents and delegates
• concession holders and trustees
• joint venture, partnership and profit-sharing parties
• third-party contractors further down a chain of subcontracts

An associated entity comes within IBAC’s jurisdiction where it performs a public function and there is a link between the suspected conduct and public funds. Private contractors are not automatically in scope. Each matter turns on the function performed, the funding connection and the conduct itself.

The reforms also let IBAC look at some historical conduct. Complaints received before the laws passed, but not yet dealt with, can be investigated under the new powers. Closed or dismissed matters cannot be reopened.

Grey corruption is now in scope

The second change matters as much as the first. Corrupt conduct no longer has to be tied to a criminal offence. It can now include a serious disciplinary matter: serious misconduct, conduct warranting termination or significant contractual sanctions, and serious breaches of a code of conduct.

That brings so-called grey corruption into view. Cronyism, favouritism in procurement, undisclosed conflicts of interest and misuse of confidential information may not be crimes. They can now be investigated.

Two further details deserve attention:

• The benefit does not have to be received. An intention to obtain it can be enough.
• Non-financial benefits count. Priority access to future contracts or tender opportunities can be relevant, not just cash or gifts.

The reforms also make it easier for IBAC to hold public examinations, removing the requirement to show exceptional circumstances. For a business, that means reputational exposure can arrive well before any finding is made.

Who is most exposed

Construction and infrastructure will almost certainly be the early focus. A major public project can involve a government agency, a head contractor, a consortium, dozens of subcontractors, labour-hire firms, consultants and suppliers. Every one of those links now sits inside the frame.

The timing reinforces the point. Victoria is establishing a Royal Commission into the Integrity of Major Public and Civil Infrastructure Projects, and has proposed an Office of the Special Prosecutor to pursue what it uncovers. Victoria Police’s Taskforce Hawk is already charging people over alleged secret commissions in the construction industry, including one man over more than $424,000 in alleged fraud on 1 September.

Outside construction, the reach extends to anyone delivering a public function with public money: health and community services providers, IT and consulting firms, facilities management, transport contractors and local government suppliers.

What I have seen from the inside

I have spent a large part of my career in law enforcement, workplace regulation and government integrity work, across two countries and two legal systems. One pattern holds everywhere: corruption rarely starts with a grand scheme. It starts with a small favour, an undeclared relationship or a variation nobody questions.

By the time an integrity body arrives, the organisations that fare best are not the ones with the thickest policy manuals. They are the ones that noticed the warning signs early, tested them properly and kept records that stand up to scrutiny.

The organisations that fare worst have usually done one of two things. They ignored an internal concern because the person involved was valuable. Or they ran an internal review designed to close the matter quickly rather than establish the facts. When an external investigator later pulls the same threads, that review becomes part of the problem, not a defence.

What to do now

If your business touches Victorian public money, these are the steps I would take this quarter.

1. Map your contract chain. Identify every subcontractor, agent, joint venture partner and labour-hire provider on each government-funded job. Know where the money goes and who approves it.
2. Vet the people you work with. Refresh due diligence on third parties: ownership, conflicts, adverse history and links to public officials. Proportionate, but real.
3. Test your procurement controls. Look hard at tendering, variations, gifts and benefits, and conflict of interest declarations. Grey corruption lives in these gaps.
4. Fix your reporting channels. Staff and contractors need a safe, credible way to raise concerns, and a process that acts on them.
5. Decide now how you will investigate. When a concern surfaces, know who will look into it, how evidence will be preserved, and how you will respond if IBAC, a Royal Commission or police make contact.
6. Keep records that will survive scrutiny. Decisions, declarations and investigation findings should be documented as if an independent body will one day read them. Under these laws, one may.

Why independence matters more than ever

The lower threshold changes the question businesses need to ask. It is no longer only whether something was illegal. It is whether the conduct would survive an independent investigation into how public money was spent.

That is exactly why an internal matter should be examined by someone with no stake in the outcome. An independent, properly documented investigation protects the organisation, protects the people wrongly suspected, and gives decision-makers findings they can defend in front of a regulator, a tribunal or a court.

A second tranche of IBAC reforms is due next year. The direction of travel is clear, and the businesses that prepare now will be in the strongest position when the scrutiny arrives.

At RIVICA, I personally lead every engagement. If your organisation delivers publicly funded work and you want a discreet, independent view of an integrity concern, or of how well your controls would stand up, contact me at rivica.com.au or on 1300 748 422.

This article is general information only and is not legal advice. Organisations should obtain legal advice on how the reforms apply to their circumstances.

Sources

• ABC News: IBAC granted ‘follow the dollar’ powers, 24 September 2026
• Ashurst Perkins Coie: IBAC’s new powers and the private sector, 15 September 2026
• Inside State Government: New powers passed for Victorian integrity agency
• AIPI: Investigation & Fraud News, week ending 4 September 2026

Published by Richard James, Founder and Principal Investigator, RIVICA Investigations & Covert Solutions