O'Neil says it is a standing joke in the game that Leeds are cash-strapped because other players are aware of what some members of the Leeds squad are earning.
Leeds paid £1.15m to Preston for Richard Cresswell last August, and a further £650k for another former North End striker in David Healy in October 2004.
Speaking after the Coca-Cola Championship play-off semi-final defeat O'Neil said: "We've seen what can happen. West Ham made a huge investment last season and it paid off for them, while Leeds made a massive investment this season.
"I know Kevin Blackwell has been pleading poverty, but I wish I was as poverty-stricken as him and Leeds because when it comes to the salaries their players are earning, it's a bit of joke that.
"If ever someone was protecting his back, then it's him because they have made a huge investment, in particular they took a couple of players from us.
"There's no way Preston could match the packages they were getting."