His task is unenviable: Make the rounds on Capitol Hill and the 50 state capitals, acting as a one-man deflector of bills that consumer activists say would better protect customer financial records but that industry officials say would curb the cross-marketing opportunities created by integrated financial services.
Nevertheless, the selection in January of Mr. Pitts, a longtime Republican operative, as executive director of the Financial Services Coordinating Council could seem odd -- considering that the council has plenty of in-house lobbying talent. The council is a coalition of five banking, insurance, and securities trade groups.
His impeccable GOP pedigree -- which includes stints under President Reagan, Vice President Quayle, and the current Energy secretary, Spencer Abraham -- is especially valuable now that Republicans control the White House and both chambers of Congress.
Lobbyists at the five groups that fund the council applaud his keen political skills.
He is able to see around corners and see into the future when it comes to the political landscape, said Robert A. Rusbuldt, executive vice president of the Independent Insurance Agents of America. He has a sixth sense when it comes to trends and where bills are going to go and how to get them there.
In an interview, even Mr. Pitts made no bones about the fact that he is well-connected and will use that to his advantage.
"I am a poster child for Washington is based upon relationships and who you know," he said.
Restrictions on financial information were born in the Gramm-Leach-Bliley Act of 1999. Rules that will take effect on July 1 bar financial institutions from sharing customer data with third parties unless they get permission. Information sharing among affiliates is allowed, however. The financial reform law gave the states the right to enact tougher privacy laws.
That means the industry has two options: Push for a federal law reversing this policy and preempting tougher state laws, or fight individual state efforts as they come up. Mr. Pitts favors the latter approach.
"I am less hopeful of a federal preemption because I'm not sure we could control the process once it hits Capitol Hill," he said. "Rather than a ceiling, what we would end up with would be a minimum floor."
For now, he continues to use the mantra the industry used to defeat privacy hawks last year: Lawmakers should wait and see how the Gramm-Leach-Bliley privacy protections work. "It's a little premature to start strengthening something that hasn't even technically gone into effect," Mr. Pitts said. "We need to let this play out before we start talking about strengthening or compromises."
But some state legislatures aren't waiting.
Just last week Mr. Pitts and the groups he represents worked quickly to stop a bill in the New Mexico Legislature that would have required consumer consent before a business could disclose any personal information. The bill was set aside in committee on a 6-to-4 vote, and the Legislature adjourns on Saturday.
Also high on his list of priorities is the California Legislature, which has roughly 20 privacy-related bills pending. Though the energy crisis has distracted lawmakers, Mr. Pitts said he fears they could turn to privacy legislation as a way to mollify consumers furious about bungled power deregulation.
Action in a large state such as California could supply a template for other legislatures, he said. "California is potentially a problem. If they can't solve the energy problem, they have to find a way out."
A host of other states are considering privacy bills, and the National Association of Attorneys General is meeting this week to work on the issue.
Mr. Pitts recently met with attorneys general from states such as Pennsylvania and Illinois. He said he spends about 40% of his time on visits like these -- meeting with power brokers in their offices or at lunches and receptions. He's also targeting Bush administration officials who he hopes will support the industry's positions on privacy.
"We have the opportunity to get the doors open and a chance to make our case to them, and I think they will listen to what we have to say," he said.
Mr. Pitts, 45, came to Washington in 1980 after the late Lee Atwater, a fellow South Carolinian, brought him into Ronald Reagan's first presidential campaign. For eight years he did advance work for President Reagan's trips.
After working on the Bush campaign in 1988, he joined Vice President Quayle's staff, rising to director of political affairs. That's where he met Mr. Abraham, who was the Vice President's deputy chief of staff.
After President Clinton won the White House in 1992, Mr. Pitts and Bill Kristol, who had been Vice President Quayle's chief of staff, founded the Project for Republican Future, which worked to help Republicans take control of Congress. They did in 1994, and the project evolved into The Weekly Standard, a weekly political magazine launched in 1995.
Mr. Pitts was its publisher until 1997, but by then Mr. Abraham had won the Michigan Senate seat vacated by former Senate Banking Committee Chairman Donald Riegle, and Mr. Pitts joined the senator's staff. For two years he worked on the digital signatures bill that was enacted in 1999.
Sen. Abraham lost his re-election bid last year, so Mr. Pitts, a father of five, was seeking employment when the council job came up. "The timing was perfect, and the issue was of great interest to me," he said.
And though he is committed to the cause, Mr. Pitts clearly has a sense of humor about his work. Talking about the California Legislature's possibly passing a tough privacy bill, he said a good friend now runs the Department of Energy. "If it starts to be a problem, I'll make sure Secretary Abraham shuts the lights off," he joked. It's hard to produce legislation when it's dark.(c) 2001 American Banker
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