Former Liberal police and transport minister David Elliot was summoned to appear before the NSW Independent Commission Against Corruption on Friday.
The commission was told in July of a salacious "David Elliott shit sheet".
The file was said to have contained allegations of an extramarital affair and background on an incident involving Mr Elliott pictured firing a sub-machine gun at a correctional centre.
Liberal staffer Dylan Whitelaw told the inquiry he prepared the document upon instruction from Liberal-affiliated lobbyist Jeremy Greenwood.
He accepted it could have furthered the interests of developer Jean Nassif.
Mr Greenwood was also questioned on the file.
The sheet was not created to help Nassif gain political leverage, Mr Greenwood told the inquiry.
Instead, it defended him from attacks he faced from the then-police minister.
A lawyer for Mr Elliott later established the pair had not met.
Mr Elliott also released a statement rejecting "all accusations made by the young boy Dylan, and his colleagues on the religious right of the Liberal Party", in response to the sheet.
The inquiry is probing allegations Liberal operatives took donations in return for furthering Nassif's interests, including harming Mr Elliott's reputation.
On Thursday, the probe heard evidence about an apparent plot to pressure another of Nassif's adversaries from government.
Building commissioner David Chandler briefly resigned in 2022 following an internal investigation ordered by the office of his portfolio boss Eleni Petinos.
Mr Chandler, who led a public campaign against rogue developers, was cleared of wrongdoing and later returned.
Ms Petinos detailed "subtle" nudges from factional players to move against Mr Chandler during her time as fair trade minister.
She also recalled comments "made in passing" from Dominic Perrottet's brother Charles and another conservative, Chris Spence.
Her chief of staff Cassandra Lawry alleged a video which could "get rid of" Mr Chandler was referred to her.
Counsel assisting Peggy Dwyer SC asked whether Ms Petinos suspected she or her office were being "used to try and get rid of Mr Chandler".
Ms Petinos said "subsequently" she had.
"Frankly, even the little I knew coming into here today is enough to leave me disgusted and to feel like personal relationships were lent on in a highly improper way, and that's not someone that you would call a friend," she said.
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