Current and former police officers, two state MPs, members of private organisations and public servants who have access to databases containing sensitive information regularly meet for lunch in the name of The Brotherhood, according to Ombudsman George Brouwer.
Mr Brouwer says the group has an emphasis on exclusivity and secrecy and has the potential for illegal information trading.
In a report tabled to parliament on Wednesday, Mr Brouwer says there are up to 350 men on The Brotherhood's circulation list.
The report says men on the list have been the subject of criminal and corruption investigations.
They include a former Victoria Police officer with alleged links to an organised crime figure, a former Australian Wheat Board executive accused of involvement in the Iraq kickbacks scandal, and the manager of a table-top dancing club regulated by the police.
Victoria Police Chief Commissioner Simon Overland has told Mr Brouwer he is deeply concerned about The Brotherhood's activities.
The founder, former police officer John Moncrieff, says there is nothing clandestine about the gatherings of "men of good ilk", for lunch at The Kelvin Club in Melbourne's CBD.
"We're not secretive and we're certainly not corrupt and we have nothing to hide," he told Fairfax Radio on Wednesday.
"I certainly don't wear a white hood and have a couple of holes cut out.
"I'm just an easygoing Australian man that's a businessman.
"I live by a simple creed that you can't go wrong doing the right thing."
Mr Brouwer said the culture of The Brotherhood was evident in its name.
"In this context of police culture it is commonly used to emphasise exclusivity, secrecy and a culture that requires police at all levels to do whatever is required to protect their fellow police," he said.
"This culture protects police officers who break the law and strongly discourages others from blowing the whistle on corruption."
Mr Overland said he had "deep concerns" over The Brotherhood's activities and the direct involvement of serving and retired police.
"Such gatherings, even when totally benign, have the potential to undermine confidence in public institutions - especially policing," Mr Overland states in the report.
But Police Association secretary Greg Davies said unless any improper behaviour had been proved, The Brotherhood was just a group of men having lunch.
"If that's all it is, no I don't think there's anything to worry about," Mr Davies told reporters.
Mr Brouwer said The Brotherhood, which was formed in 2003, was established to serve the interests of the founder, who controls membership of the group.
He said he was satisfied the MPs had no involvement with The Brotherhood and had been placed on circulation lists without their agreement.
Mr Moncrieff denied Mr Brouwer's assertion a police officer on The Brotherhood list used his position at the traffic camera office to wipe $2000 worth of the founder's speeding fines.
A Victoria Police investigation into the officer involved was under way, the ombudsman said.
Mr Brouwer also found a senior police officer may have disclosed the identity of a prosecution witness in a high-profile murder investigation during a Brotherhood lunch, in breach of a Supreme Court suppression order.
Mr Moncrieff denied using The Brotherhood meetings to secure contracts for his security company MONJON, which lists among its clients Thiess, the design and construction contractor for Victoria's Wonthaggi desalination plant.
Government MP Richard Dalla-Riva admitted he was one of the two MPs put on The Brotherhood's list without their knowledge.
"I confirm the statement in the ombudsman's report that I had no involvement with the Brotherhood and my name was placed on the circulation list without my agreement or knowledge," Mr Dalla-Riva said in a statement.
"I also confirm the Ombudsman's statement that I did not attend any Brotherhood lunches nor respond to any requests for assistance.".
aap 2 Feb 2011