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2011 Horatio Alger Award Winner

Frederic V. Malek

Founder and Chairman
Thayer Lodging Group

"I don’t measure success by the money you make, but by what you do with it to help others."

Fred Malek was born in 1936 in Chicago, but was raised in Berwyn, just outside of the city. At that point in time—and for much of the future—his father worked for a beer distributor, making deliveries to taverns. “My dad was a hard working man,” he says. “He didn’t have the benefit of a college education, but he was very gregarious and friendly. My mother also had only a high school education, but she was more disciplined and directed. She ran the family and I thought of her as my boss. She told me I could be anything I wanted to be, but I would have to work hard for it. She expected me to work hard.”

The Malek family lived in a blue- collar, mostly eastern European ethnic neighborhood. Fred Malek describes many of the houses there as two-story bungalows in which one family lived on the top floor, and one on the bottom. That was his family’s situation—his parents owned the house and rented out the top floor. Eventually, his father built an apartment in the basement and Fred’s aunt and uncle rented it.

His parents, the children of immigrants, came from large, working-class families. Many of his uncles were policemen or firemen. “No one in my family had ever gone to college,” he says, “but they were imbued with a kind of Old World ethic of hard work, thrift, and cleanliness. They were good role models because they worked hard, they persevered, and they always tried to put a little in the bank for savings. We all came together on Sundays and I liked being with my family. My parents were straight-forward, honest people who taught me to always do the right thing.”

From the time he was 16, Fred worked every summer. He drove a delivery truck for a bakery, and then worked for a brewery packing beer bottles. At one point he worked in a meat packing plant hauling beef, which was a grueling job. When contemplating his future, his parents wanted him to go to college and encouraged him to be a doctor. Fred had no concrete career ideas of his own and was willing to give pre-med a try. Still, money was a problem. He enrolled in Morton Junior College in Cicero to save on tuition. However, he had heard great things about West Point, and after watching a movie about West Point he began thinking he would like to go there. He was intrigued by the values, culture, and of course the free education.

He wrote his congressman and took an exam on which he did well, but rather than getting the appointment he was designated first alternate. He became a cadet only after the number-one candidate failed his physical.  “The day the letter arrived admitting me to West Point was the happiest day of my life,” he says. “I couldn’t believe I’d been selected, and nobody else could either.”

But Fred’s enthusiasm was clipped once his West Point days started. The first year was a tough one for him, and he feared he wouldn’t make it. “I had no military experience,” he says. “I had never been anywhere except for vacations in Michigan, wasn’t worldly, and didn’t understand a lot of what was expected of me. At first, I hated it and wanted to quit every day. Especially tough was having to spend Christmas there, but I stuck with it, worked hard, and finished that first year in the top 10 percent of my class.”

Throughout the remainder of his time at West Point, where he earned a degree in engineering, Fred Malek never learned to like it. Yet when he looks back on those experiences today, he says the school greatly influenced his life and he now views his time at West Point with affection and reverence. In fact, he is serving a presidential appointment to the West Point Board of Visitors, and chairs their capital campaign. “I’m deeply devoted to the school,” he says. “It taught me honor, perseverance, and the importance of discipline.”

When he graduated West Point in 1959, Fred Malek chose to serve in the infantry. He went through Officer’s Infantry School, and then through Airborne School and Ranger School. He volunteered to join a Green Beret unit in Vietnam to train Vietnamese ranger companies. Six months later, he transferred to the finance corps stateside and married his sweetheart, Marlene. To earn money needed to attend graduate school, he worked at night selling encyclopedias door-to-door. “My first job selling encyclopedias was dismal,” he says. “I got to the point that I hoped nobody would be home so that I wouldn’t be rejected. But one day someone must have felt sorry for me and bought a set of books. That changed the whole thing for me. I became confident and became the highest selling salesman in Hawaii.”

Fred saved enough money from this job to finance his graduate education at Harvard Business School. While there, he worked on the school newspaper selling advertising and created a side business arranging the typing of résumés. After Harvard, he went to work for McKinsey & Co., a consulting firm. Looking for more opportunity, he teamed up with two friends to buy and develop their own company. To put their plan in place, they drew straws. The one who drew the short straw would quit his job and work full time to find a company they could buy, and the other two would pool their earnings and divide it three ways. A year later, they bought the Utica Tool Company in Orangeburg, South Carolina. Mr. Malek invested his life savings of $17,000, as did his two partners. They found a few investors and borrowed the remainder of the $9 million needed to buy the company.

Mr. Malek quit his job and drove with his wife and son to Orangeburg, where he rented a house and went to work turning around and building up his new company. In less than two years, the company was thriving and went public. At the same time, in 1969, Fred Malek received a call from the newly confirmed Secretary of the Department of Health, Education, and Welfare Robert Finch, who offered him the position of HEW’s deputy under secretary, which he accepted.

In 1970, Mr. Malek was sent to the White House personnel office, where he was responsible for recruiting and hiring all presidential appointments from cabinet through boards and commissions. Later, he became deputy director of the Office of Management and Budget. He worked through the devastating Watergate scandal, but knew his time in government service was coming to an end. “I was standing on the White House lawn when the President resigned,” he says. “I felt that it was time to get back into the real world.”

Mr. Malek worked for the Ford administration for a short time, and then accepted a job with the Marriott Corporation in 1975. After turning around Marriott’s cruise ship division, Mr. Malek was promoted to executive vice president. In that position, he took over the food service division and increased profitability and growth. He then became president of Marriott Hotels & Resorts for the next eight years. Under his direction, the company saw a fivefold increase in profits and an eightfold increase in stock value. He remained politically active, and was appointed by President Reagan to several presidential boards and commissions.

When George H. W. Bush asked Fred Malek to run the Republication Convention in 1988, he interrupted his business career, resigned from Marriott, and ran a successful convention in New Orleans. “I think more Americans should serve their country, but it’s not easy,” he says. “I wouldn’t trade my political experiences for anything, but I can’t recommend it to everyone because it is quite a difficult career path. I never considered the power that was behind the government jobs. Instead, I relished the achievement. It was exhilarating. My team at the Office of Management and Budget was one of the best teams of people ever assembled in government.”

In the following years, Fred returned to business. He led the buyout of CB Richard Ellis and served as its co-chairman, co-led the buyout of Northwest Airlines and served as its president, led the buyout with Marriott of the Ritz Carlton Hotel Company, partnered with George W. Bush in buying and owning the Texas Rangers Baseball Club, and founded two private equity firms, Thayer Lodging Group and Thayer Capital Partners. Always mindful of his civic interests and obligations, Fred also served President Bush as director of the Economic Summit of Industrialized Nations, which earned him the lifetime rank of Ambassador, and as campaign manager of his re-election effort.

Mr. Malek went on to head John McCain’s finance efforts during his presidential campaign in 2008. He serves as chair of the Finance Committee as well as the Executive Roundtable for the Republican Governors Association. About 18 years ago, he founded a private equity firm devoted to hotel investments, and he now divides his time between his firm and his political interests. “I have a much fuller plate than I’d like to have,” says Mr. Malek when asked about his many and varied activities. “I have had a life-long quest for achievement. I learned at an early age that satisfaction comes with achieving. But it is also important to work hard on behalf of the principles you believe in.”

Fred Malek readily admits that West Point molded his personal philosophy to “choose the harder right, rather than the easier wrong. That’s my advice to today’s young people. Try to achieve those goals that are pointed in the right direction, and treat every person you meet with dignity and respect. You will get greater satisfaction from helping others, rather than yourself.”

Mr. Malek believes education is more important today than ever before. “It’s hard to compete without it,” he says. “We are in the age of specialization. I think it is extremely important for the country to ensure our youth are educated.”

Even though Fred Malek’s success in life is evident, he says success for him is never final. “As soon as you think you are successful, you will be at the top of the hill sliding down,” he explains. “I think it is better to just take pride and satisfaction from achievement. And if you get knocked down, get right back up on the horse and get going. It’s discipline, perseverance, and dedication that will lead to success.”

Fred Malek is the founder and chairman of the American Action Network, an organization dedicated to developing a set of policies that are center-right in the realm of politics. He also serves as chairman of Governor McDonnell’s Commission to Reform and Restructure Government in Virginia.

Outside of the business and political arenas, Mr. Malek is co-chair of the largest capital campaign ever sponsored on behalf of West Point. Recently, he was elected chairman of the West Point Board of Visitors. He also serves on the board of the Aspen Institute, the Bush Library Foundation, and the America-Israel Friendship League. He is chairman of the American Friends of the Czech Republic.