California declared some of its first power emergencies of the summer this week as energy supplies dwindled and temperatures soared, but in Sacramento today, it was former presidential candidate and Texas billionaire Ross Perot who was on the hot seat, reports CBS News Correspondent Vince Gonzalez.
The founder and chairman of the board of Perot Systems -- a company California paid to help design its new deregulated energy market -- faced a state senate committee investigating energy market manipulation.
Last year, a shortage of electricity led to the near-collapse of California's three largest investor-owned utilities and a round of rolling blackouts. State officials have blamed many of the problems on market manipulation by out-of-state electric generating or trading companies, including the now-bankrupt Enron Corp.
"Perot Systems did not contribute to the California energy crisis," Perot told the panel.
But investigators say documents show Perot Systems tried to sell power companies a blueprint on how to make more money by beating the system it helped design.
"It appears that Perot Systems was acting in secret," said State Sen. Joe Dunn.
Not true says Perot.
"Perot Systems did not reveal any confidential information about the California market to anyone."
He said Perot Systems did not help the power companies that cost California billions and all the information it tried to sell was publicly available. Perot said the company even helped the state by reporting some of the flaws in the system it discovered.
"You never compromise the highest ethical and moral standards in our company. That is not allowed," he said.
Investigators question those standards. In company documents, employees discussed "the holes" they found; "which ones should be plugged, which should be used." In a presentation prepared for Enron, the company promised to "Maximize Enron profitability despite actions of ... regulators." Another document boasts of key Perot employees: "their minds are devious enough to readily search for and find gaming opportunities."
Mike Florio, a member of the board that runs the state's power grid, says California was betrayed.
"We thought these were our people," Florio told Gonzales. "They were gleeful to take advantage of what they had learned, and that is very troubling to me."
Part 1: Power Questions For Perot