Some critics feel the Olyroos should be a developmental team towards the Socceroos but Arnold says that Verbeek was the first man he contacted about the final squad for China.
"If the Olyroos should be a developmental squad, why are Brazil taking the players they're taking, why are Argentina saying it and why is the chairman (Frank Lowy) saying he wants a medal?" Arnold said in Sydney.
"I am not here to tell you all the insides and outsides (of the working of FFA). At the end of the day I work with Pim Verbeek and there are certain people trying to drive a wedge between me and Pim Verbeek, which is ludicrous," Arnold complained.
The federation's head of corporate and public affairs, Bonita Mersiades, added: "The Olympic squad is not just a development squad. It is a squad there, as Graham said, to win a medal.
"In selecting his team, which is well and truly Graham's decision, he has consulted with the national coach, with the national technical director and all squads go through an approval process within Football Federation Australia.
"So whilst it is Graham's call to pick who he chooses, it is done in full consultation with the system that the FFA wishes to use and is set by the national technical director and with which every national coach is compliant."
Arnold continued: "Pim was informed of the squad four to five days before anyone else. As Bonita said, I have to go through a process. I just don't pull out a squad and just pick it and say that's my squad - that's it.
"Rob Baan (FFA technical director) was informed of the squad. They ticked off on the squad. It then goes to Ben Buckley (CEO) and John Boultbee (head of high performance) and the board and they ticked it off. It's not my squad - it's FFA's squad."