Sexual abuse in the Catholic Church gets covered up through a system of blackmail and ''sacred silence'', according to the founder of the Broken Rites advocacy group, Chris Wilding.
She said sexual activity by priests and bishops set up a pattern of institutional secrecy and a system of blackmail that reached the highest corridors of the Vatican.
Ms Wilding told the Victorian inquiry into how the churches handled sex abuse that celibacy was a myth, and that when a priest was promoted his sexual partners could also advance.
''It is this system of blackmail that is central to the response of bishops, locally and around the world, relocating paedophile priests. If the bishop is compromised because he is known to be sexually active, the predatory cleric resorts to blackmail,'' she said.
Her testimony came as victims told of vicious cruelty and sexual abuse in Catholic Church-run institutions.
Gordon Hill said he was first abused at St Joseph's Home in Ballarat in the late 1940s when he was five.
''I was cleaning a staircase when I was pulled up by the ears by a nun and taken to a room with a priest,'' he said.
Mr Hill said he was abused repeatedly until he went to a different part of the home at 11, and was used as slave labour - sent out to farms and once a pub to work for nothing.
He said he was punished by being stripped naked in front of the whole school, spread-eagled by four bigger boys, and beaten on the back and buttocks by a priest with a thick wooden rod. Because he bled on the floor he was thrown in ''the dungeon'' - an underground punishment room where he slept on a concrete block covered with hessian sacks - for a month.
He never set foot in a classroom except to clean it, and taught himself to read and write after he was 18. His feet were deformed by years of having only two right-shoes, and to this day he has to buy two pairs.
Ms Wilding also attacked Peter O'Callaghan, independent commissioner of the Melbourne Archdiocese abuse protocol, as a ''Mr Fixit'' whose job was to ''snuff out the scandal, pay out the victims, shut them up, deter them from reporting to police and at the same time gather the information for the church''.
Ms Wilding said the church had the help of police, judges, politicians and the media. ''The tentacles of bishops, archbishops and cardinals reach into every agency of power. The crimes of clerical abuse could not have been smothered and the spot fires extinguished without the interference and willing co-operation of persons in other agencies of power.''