Victorian Labor MPs who took part in the $388,000 rorts-for-votes scandal discredited parliament but are not in contempt, a majority report by the powerful privileges committee has found.
But scheme architect and then-leader of the opposition in the upper house, John Lenders, acted with "deliberate disregard", the inquiry found.
Committee chair and independent MP James Purcell told reporters the evidence was not there to make a finding of contempt but there were a "lot of should-have-known-betters".
The report said Labor MPs, including now-ministers, should have sought more detail from Mr Lenders and parliament about the permissibility of the scheme.
"Members' conduct in participating in the scheme has brought discredit on the parliament," the report reads.
"Mr Lenders acted with deliberate disregard for the members' guide and his actions were contrary to the standard expected of a member of parliament."
The inquiry came after Ombudsman Deborah Glass released her own report in March, finding Labor systematically misused parliamentary allowances to pay for campaign staff who were hired on electorate officer time sheets.
Ms Glass described the scheme as an "artifice" but also acknowledged the MPs involved did not set out to deliberately deceive.
The report recommends enacting all of Ms Glass' recommendations to make rules around parliamentary behaviour clearer and improving investigative capacity into misuse of entitlements.
But Mr Purcell told reporters it did not matter how many rules were written, as it was up to politicians to behave better.
"The reputation of parliament gets damaged every day, by the way we behave, by the way we act, by what we do. I think it's difficult to pin that on one particular person," he said.
"If we got thrown out for that, we wouldn't have many politicians left. It's a sad indictment but it's the truth."
The committee's Liberal and Nationals members have done their own minority report which found "the lack of a contempt finding against Members of Parliament involved in the scheme does not indicate that there was no wrongdoing."
Greens committee member Nina Springle also wrote her own minority report to highlight the "profoundly opaque" nature of the Department of Parliamentary Services and the "grey areas" around regulation which enabled the scandal.
Victoria Police's fraud squad is currently investigating the matter, arresting and releasing without charge 17 former campaign staffers as part of it.
