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This all concerns with the company policies and internal controls. In normal cases, a company policy never allow the sub-ordinates to react against their immediate bosses. So, If my boss is involved in some under-table transactions with any supplier, his immediate boss is responsible to bring this matter to the top management.
I would make my boss understand, what he's doing is harmful for the company. He too can be in great trouble. If he understands and stops, I would never let my colleagues know about it. but if he continues to do so I will bring this matter to top managers notice for the benefit of company
In my humble opinion i would prefer to stay away from the issue. As long as i am not involved in the issue in any way , let the higher administration discover and stop him. In case i tell the higher administration questions will be coming back to me like who did i know and from when... i will not be rewarded instead i will be called a snitch and may lose my jobs without gaining anything.