Mr Scully had his turn before the Independent Commission Against Corruption (ICAC) as investigations continued on Tuesday into whether Mr Obeid lobbied state ministers to have retail leases at Circular Quay renewed without going to tender.
Mr Scully told the commission that Mr Obeid was furious with him when he turned down his request for a five-year extension to a lease held by Tony Imad.
It's since emerged that Mr Imad's businesses were bought by an Obeid front company in 2002, with relative John Aboud acting as the public face.
Mr Scully denied a claim by Mr Obeid's lawyer, Stuart Littlemore, that much of his evidence was untrue and was borne of hate for the disgraced former minister.
Mr Scully and Mr Obeid both belonged to Labor's Terrigal faction, but their friendly relationship soured when the powerful cabal backed Morris Iemma's bid for the premiership.
"No. He was one of a number of people that secured the election of Morris Iemma but I think 'hate' is the wrong word," Mr Scully said.
Like all previous ministers appearing before the ICAC, Mr Scully said Mr Obeid never revealed his family's hidden interests in two restaurants and cafe at the quay, which earned the family about $2.5 million annually.
"I regard that as quasi-criminal," Mr Scully said.
Mr Scully was ultimately in charge of the leases as ports minister from April 1995 to December 1997 and again from April 1999 to April 2003.
Five-year leases were signed in 2000, with the understanding expressions of interest would be sought when they ran out in August 2005.
But the inquiry heard Mr Obeid asked Mr Scully for a five-year extension on a lease held by Mr Imad after documents were signed and a lengthy process, including ICAC approval, had been undertaken.
"He said ... 'he's spent a lot of money in doing the shop up and a five-year lease is not long enough'," Mr Scully said.
"(I said) 'It's not going to happen' and then I said, 'and besides Tony Imad's a crook'."
Mr Obeid then became "very angry" and upset and screamed "Tony Imad's not a crook ... He's a hard-working small business family man," Mr Scully said.
The inquiry continues before Assistant Commissioner Anthony Whealy.
It's expected to last another two weeks.
news.com.au 5 Nov 2013