The result was officers grew a small-time criminal steroid importation operation into a bigger coordinated drugs importation ring, said Philip Moss, commissioner for law enforcement integrity.
Moss, who investigated known corrupt practices at Sydney International Airport, said corruption "denial" was rife in Australia's customs service to the point rogue officers forged links with outlaw biker gangs.
His report said the network operated for five years because Australia's border security agency failed to implement basic anti-corruption measures, The Age newspaper reported.
The report said the operation was protected because complacent senior management at the airport believed corruption couldn't exist.
The report, obtained by The Saturday Age, was the second report by Moss into corruption in the border security agency at the airport.
The Age said Home Affairs Minister Jason Clare promised anti-corruption measures are being implemented at the airport in the wake of an earlier report by Moss and the Australian Federal Police that investigated security gaps at Sydney Airport.
Clare told The Saturday Age customs officers will be banned from using cellphones in secure areas to stop them from contacting criminals when they land.
"The key to tackling corruption is structural and cultural reform," Clare said. "There is a lot more to come."
The government committed $700,000 this year to setting up a national anti-corruption plan and has started a consultation.
Moss said customs management widely assumed there was no corruption and so "too little attention was paid to systemic vulnerabilities."
The Moss report said customs officials began importing steroids in 2007 in exchange for allowing friends and relatives to exceed duty-free limits on goods.
The steroid imports expanded to include more officers and the importation of drugs from Thailand and Vietnam.
Federal police have arrested four customs officers, a quarantine official and more than a dozen drug couriers for trafficking and bribery since last August, The Age reported.
The Age also reported a number of officials suspected of less serious misconduct or improper associations have been disciplined or have resigned and police expect to make more arrests.
A recent document by Transparency International Australia said complacency is the "single largest risk" in Australia when it comes to corrupt practices in public and private sectors.
In a submission in May to the government's consultation on setting up a national anti-corruption plan, Transparency International said the frequent assumption is that because corruption doesn't appear as bad in Australia as elsewhere, there is little of it happening.
"Contrary to international perceptions that Australian public and corporate life is relatively corruption-free, Australian public affairs since the 1980s have continued to feature major corruption scandals, on an annual or more frequent basis, affecting all levels of government as well as Australian-controlled businesses."
Australia is a signature to the 2005 United Nations Convention Against Corruption.