Interesting article in today’s Washington Post business section about Robert Johnson raising $1.2 billion for his third private-equity fund that invests in the hotel industry.

The Post ran my thoughts on what’s happening these days in the hotel industry:

Fred Malek, co-chairman of Thayer Lodging, a private-equity fund that buys and manages hotels, said now is a good time for hotel deals.

“This should be an excellent time to acquire hotels because values are coming down somewhat, some owners do not have the financial capability to upgrade their hotels to meet consumer demands and brand standards, and thus, they will be forced to consider sale,” he said.

I was also thrilled to see my wife quoted in today’s Style section – the story about Debbie Dingell’s efforts to make Michigan a prominent political player in choosing our president.  Here’s what the article said:

“She’s very involved in Michigan,” says her Republican friend Marlene Malek, with whom Dingell holds an annual bipartisan, women-only lunch during the December holiday season. “She’s always there. She’s always doing something political and not political. She has a whole other life out there.”

By the way, if you’re curious about that lunch Marlene holds with Debbie Dingell, here’s a nice write-up that appeared in the Politico’s “Shenanigans” column last month:

Wonder women

All spotted sitting at the same table during lobbyist extraordinaire Debbie Dingell and D.C. socialite/philanthropist Marlene Malek’s all ladies lunch today at the Four Seasons, hosting 300 of D.C.’s high powered ladies: Romney spokeswoman Barbara Comstock, Fred Thompson advisor Mary Matalin, wife of Sam Donaldson, Jan Smith, Tammy Haddad of Haddad Media, former head of the RIAA Hilary Rosen, MSNBC host Norah O’Donnell, lawyer and wife of Howard Fineman Amy Nathan and “Meet the Press” executive producer Betsy Fischer. Topics of conversation? Not so much politics as…Hannah Montana tickets. Also in the room of wonder women? Lynda Carter.

I just got back from campaigning for John McCain in New Hampshire. Here’s a fun account of McCain’s victory in today’s Washington Post:

John McCain’s bus just pulled into a polling place on Broad Street, and McCain dived into the media scrum and disappeared from sight. It is possible that he was devoured by camera people; later I’ll look for the bones.

Off to the side stood a white-haired gentleman holding a “McCain” placard. But this was no ordinary volunteer — it was Fred Malek, the big-cheese Republican (and would-be Washington Nationals owner). He said he’s co-chairman of McCain’s campaign. “Chairman” is often a somewhat honorary title in a presidential operation.

“I finally found my proper role in the campaign — sign carrier,” Malek said. His wife, Marlene, was on sign duty, as well. “I’d do anything for John McCain,” she said.

Mr. Malek predicted a McCain win today and huge momentum.

“He doesn’t have to win Michigan” — Mitt Romney has a native-state advantage there — “but I think he will. You can’t underestimate the momentum that’s going to be generated by a victory here.”

Does McCain have enough money to compete in the large states?

“It’s picking up. Nothing like a little success to open the money faucets.”

As Director of the 1988 Republican Convention, my main challenge was to develop a four night program that would bring Vice President George H.W. Bush back from a 17-point deficit to Michael Dukakis in the Presidential polls. President Reagan agreed to highlight the first night with a speech focused on the foreign policy successes of the Reagan-Bush Presidency. After all, we had just won the Cold War. However, I also had to select someone to precede President Reagan with a prime time address – someone who shared his unspeakable principles and who had credibility on foreign policy. I selected the junior senator from Arizona, John McCain. He delivered an outstanding address and started the Bush-path to ultimate victory. I believed then as I do now that McCain, more than any other political leader of either party, not only shared the Reagan principles but also mirrored his strong character and conviction as well as the political courage to consistently choose the right course of action for America, no matter the political price.

John McCain is the heir to the Reagan legacy, and just as Reagan came back from an Iowa loss to become the nominee and President, so will John McCain. He will win the New Hampshire primary tomorrow because the voters of the Granite State know that this man of principle, courage, consistency, character, and national security excellence stands above all other candidates and will be a superb President. They also know he is the most likely to beat any of the possible Democrat nominees. These same characteristics will motivate voters in Michigan, South Carolina, and the February 5 states. John McCain will be the nominee, he will be President.

The Washington Post business section has two stories I’m quoted in.

One is about the business side of hotels — a year-in-review and look ahead. Here’s an excerpt.

Now revenue per available room at Marriott and Host will probably grow 5 to 7 percent, according to the companies and analysts, as a weakening economy cools spending and growth. Marriott officials stress such gains would still beat inflation. …

“You will have an abatement of the really large increases, but you are still going to have increases, so that’s good,” said Fred Malek, the co-chairman of Thayer Lodging, which owns several Marriott hotels, including one in Annapolis.

The other article is about private equity and the credit crunch:

“The days of easy money — buying something with a lot of leverage and flipping it in 18 months — are over,” said Frederick Malek, founder of Thayer Capital, a private-equity firm in the District.

There is still good money to be made in private equity through purchases at more prudent values, more conservative leverage, and building market share and profits over time. This is the old fashioned way that we have always embraced and is bases on the time proven premise that if you can improve a company’s performance, you can earn a good return.

Both articles are worth the whole read.  And here’s the photo the Post ran:

John McCain should be and will be the 2008 Republican candidate for President of the United States. If nominated, as expected, he will be our next president.

Let’s first visit why this man of honor and conviction should be the nominee.  As I wrote in an opinion piece on November 30 (The Washington Times, November 30), the four core reasons are principle, consistency, character, and national security.  Apparently, a lot of better minds than mine agree with this assessment.

As for principles, I argued that Senator McCain will always be guided by his core beliefs and not by polls. Listen to what the Manchester Union Leader said in his December 2^nd endorsement: “McCain can be trusted to make informed decisions based on the best interests of his country, come hell or high water.” Or as the Portsmouth Herald stated in its endorsement: “McCain will tell you the truth, even if it costs him the election.”

Principles of course lend to Senator McCain’s consistency. As the Des Moines Register states in its December 16 endorsement: “time after time, McCain has stuck to his beliefs in the force of opposition from other elected leaders and the public.” Or listen to Senator Lieberman in his December 17^th endorsement statement: “You may not agree with John McCain on every issue, but you can always count on him to be honest with you about where he stands, you can always count on him to stand for what he believes is right for our country – regardless of pressure from politicians or vested interests.”

And principles and consistency of course are a result of character that gives Senator McCain the courage to make the right choice no matter the political price. The Boston Globe in its December 15^th endorsement stated it well: “McCain’s views differ from those of this editorial page in a variety of ways. Yet McCain’s honesty has served him well.” Even more powerful was Senator Lieberman’s statement: “John McCain has proven that we can trust him to do what is right for our country, not only when it is easy, but when it is hard; to do what is necessary, not only when it is popular, but when it is not; and to tell us the truth, not only when it is easy to hear, but when it is not.”

Beyond these personal characteristics that have resulted in these four key editorial endorsements, and the endorsement of a great bi-partisan Senate leader, there is Senator McCain’s life long leadership and skill in defending our nation, in preserving national security. But don’t listen to me – look at the ringing endorsements of four Secretaries of State, Henry Kissinger, George Shultz, Alexandra Haig and Lawrence Eagleburger.

I would now add a fifth core reason John McCain should be the Republican nominee – electability. The most recent polling (CNN/Opinion Research of December 11^th) shows McCain beating Hillary Clinton in a head to head while Mrs. Clinton bests the other leading GOP contenders by 5 to 11 points. Respected columnist David Broder saw this even before the poll when he observed in his December 2^nd column: “If the Republican Party wanted to hold on to the White House in 2009, it will grit its teeth and nominate a ticket of John McCain for President and Mike Huckabee for Vice President.”

Well if he’s the man of proven principles, consistency, character, and national security excellence, and if he’s the Republican candidate who can win in November, - why will he get the GOP nomination? It can be summed up in these events that will play out in January:

Governor Romney will be embarrassed on January 3^rd in Iowa by Mike Huckabee winning or coming in a close second. Senator McCain, as everyone expect, will do poorly in Iowa despite the welcome endorsement of the Des Moines Register. After all, he opposes ethanol subsidies, and only about 4 percent of Iowans will turn out for the caucuses. The story out of Iowa will be Governor Huckabee who in the face of a Romney juggernaut and badly outspent, with a barrage of negative ads, came back to score. David will slay or at least embarrass Goliath.

New Hampshire on January 8^th, which is a true primary with large turnout, will be the real test. Its outcome will be largely determinant in nominating our candidate, and John McCain will defy the expectations of all those who have written him off and will win or finish a close second. The senator has been consistently rising in the polls and is now in second place, not too far behind Romney. Senator McCain will close this gap with the help of Romney’s uninspiring showing in Iowa, by the 44 percent of New Hampshire voters who are independents, by the large number of registered Republicans who have indicated an absence of deep commitment to their favored candidate, and by the large group of voters who are currently undecided. He would be aided further by a Clinton victory in Iowa, encouraging independents to vote in the Republican primary vs. a competitive Democrat Primary. The endorsements from the Union Leader, Herald, and Globe will help, but the main boost to McCain will be the Granite States’ voters realizing they want a candidate whose principles, consistency, character, and fortitude match their own. As they search deep within themselves, they will realize, as did Joe Lieberman, that John McCain is the only candidate with these characteristics – and the only candidate who can unite and lead this country.

The South Carolina primary is eleven days later. In these eleven days, Senator McCain will be celebrated as the “comeback kid.” The reasons he came up from the back of the pack will be headlined, analyzed, and discussed endlessly. And the reasons will be clear to all that they are what leading columnists and editorial boards have finally perceived; principles, consistency, character, national security, and electability. These reasons will be embraced by a state where military tradition and character are prized, and Senator McCain will win the South Carolina Primary on January 19^th.

The force of momentum from these early primaries could turn this into a two man contest – McCain vs. Giuliani. If so, where do you suppose conservative voters will go? Even if it isn’t a two man race at this point, John McCain will be poised to roll to victory in Michigan, and Florida, and the February 5^th Super Tuesday races.

John McCain will be the Republic nominee for President. And he will be the next President of the United States. If so, the American people will be well served.

I have a piece in today’s Washington Times about John McCain and keeping Virginia Republican.  Please take a look.  Here’s the link — and here’s the full article:

McCain and Virginia

November 30, 2007

By Frederic V. Malek

I am doing double duty in politics this year, serving as both co-chairman of the McCain campaign for president and as finance chairman for the Republican Party of Virginia. Officially, a state finance chair is supposed to remain neutral in primaries. But in this case, I committed to John McCain before accepting Ed Gillespie’s request to be state finance chair. I am glad I did and now see a nexus between the two.

That 2008 will be a tough battle for Republicans will not come as news to anyone. In Virginia, we Republicans have suffered three consecutive statewide losses (governor, governor and senator), and earlier this month lost our majority in the state Senate.

Furthermore, we face a popular former governor, Mark Warner, in the 2008 Senate race. Most of the margin for Democrats has come from Northern Virginia, and The Washington Post in fact has already endorsed Mr. Warner, declaring in Sunday’s editorial that the leading announced Republican candidate, former Gov. Jim Gilmore, was confrontational and irresponsible. In fact, Mr. Gilmore was a tax cutter who controlled spending and was an outstanding governor. He also helped carry the state for President Bush. Nevertheless, The Post editorial underscores the challenge we face in both the senatorial and presidential race.

We will easily keep the Commonwealth of Virginia in the red column in 2008 with a strong presidential candidate with unchanged and unshakable conservative principles and the proven national security experience to lead our nation in time of war and peril. Mr. McCain is the only candidate who meets these criteria, and this is why I enthusiastically support him. He can win in Virginia, and his lead will help our Senate candidate win as well. Both races will be helped by the two outstanding leaders who occupy the other two top statewide offices, Lt. Gov. Bill Bolling and Attorney General Bob McDonnell.

Why Mr. McCain, and why can he win, especially in Virginia? There are four core reasons: Principles, consistency, character and national security. Let’s briefly review each of these:

Principles: You may or may not agree with Mr. McCain on all of his positions, but one thing you can be sure of is that he will always be guided by his core beliefs and not by polls. Isn’t this the definition of leadership, and isn’t this what America needs in a leader?

Consistency: There is only one candidate in either party who has demonstrated consistency in his beliefs over time — who knows clearly who he is and what he stands for. The consistency in core beliefs extends from his defense of an unpopular “surge” strategy in Iraq (which now seems to be working) to social issues such as the right to life. He hasn’t changed his views to comply with voter preference — he has led voters toward his views.

Character: At my alma mater, West Point, we had a clause in the cadet motto that extolled “the courage to choose the harder right vs. the easier wrong.” Make the right choice no matter what the personal or political price might be. It encompasses principle and consistency, but is the embodiment of character. No one in recent history has demonstrated this more vividly than Mr. McCain. Most of us are aware of his refusal to be released after 3 years of torture and deprivation in a Viet Cong hell hole, unless his men and colleagues accompanied him. Who among us could show such courage? Such honor? He has continued these choices throughout his career and taking on the administration’s conduct of the Iraq war early on (supporting more troops and different tactics), forcing the administration to tighten its standards on torture prevention (who could know more about this or speak with more moral authority), and recently supporting the vastly politically unpopular but successful surge in troops.

National security: Mr. McCain has been immersed in national security his entire life and has shown leadership and skill at every turn. This extends from his time leading a Navy fighter squadron and his leadership of a group of prisoners of war, to his twenty years in the United States Senate where he has been a rigorous, consistent and effective voice on defending our country. He knows his stuff — he doesn’t need on the job training. And he has the right staff to make those truly hard decisions under duress that strike the right balance between national defense, moral authority, and respect for others.

These are the reasons I support Mr. McCain. They are also the reasons why Mr. McCain can carry the Commonwealth of Virginia and lead our Senate and congressional candidates to victory. A principled, consistent, experienced man of proven high character in a state that since the birth of the Republic has itself exemplified these characteristics.

Frederic V. Malek is a graduate of West Point and the Harvard Business School, and served in Vietnam. He also serves on a number of charitable and educational Boards.

Fred Barnes has an interesting piece in the new issue of Weekly Standard. The headline is “Off-Year Blues… But next year, Republicans might be singing a happier tune.” Here’s one nugget from the piece that caught my attention:

“The last Democrat to win Virginia was Lyndon Johnson in 1964. Bush won the state in 2004 by 8 points. ‘The right Democratic candidate can win Virginia,’ Governor Tim Kaine said last week. ‘The wrong Democrat can’t.’ Kaine, a Democrat, has endorsed Barack Obama for the Democratic presidential nomination.”

Is Gov. Kaine correct? If Democrats nominate Hillary Clinton, are they doomed to lose Virginia?

It’s an important question to consider following our party’s statehouse losses earlier this month. Democrats think what happened in the state elections are a sign of things to come. But in reality, it’s misplaced optimism by the other side to link the 2007 state elections to the 2008 presidential campaign.

This month’s state level elections were more of a house cleaning. Yes, we as a party need to cure what ills us in if we are to regain touch with Virginia voters. We need to reinvigorate the Republican brand in the Commonwealth. .

But I don’t see this being reflected in the presidential-level vote in Virginia. This was not an election based on national issues. And Hillary Clinton will not help Democrats here. Gov. Kaine is right – at least on this political matter.

I’ve been intrigued by some of the observations about the state of the Republican Party that appeared in the Virginia blogosphere after the state elections. Here are some postings that caught my eye:

Bearing Drift: “We’re in one of those change modes. It’s not an embracing of Democrat principles, because history also shows that once the voters get a taste of that, they prompt a Republican resurgence. People just want a shift, and today as long as it’s different, it’s alright.”

Bacon’s Rebellion: “The Rs have to convince voters that they’re both serious about fighting tax hikes and capable of addressing Virginia’s very real challenges. If what we hear from the Rs in 2008 is more politics of symbolism — flag burning amendments, prayer in schools, etc. — they will fail miserably. If they can advance an agenda that solves real problems and keeps spending/taxes in check, they can re-emerge as winners.”

As the finance chairman of the Republican Party of Virginia, I’m keenly interested in what the blogosphere has to say about the direction of our party. I also remain both an optimist and a realist. That’s why I agree with the following blogger who smartly observed:

X Curmudgeon: “If you go to the Wikipedia entry for “United States Presidential Election–2008” you’ll already see Virginia listed as one of about 15 battleground states. With 13 electoral votes up for grabs, Virginia is worth the fight.”

Yes, Virginia is worth the fight. And we will win it.

Hillary Clinton made two big mistakes in Tuesday night’s debate that were overshadowed by other issues and thus underreported. Her response to Brian Williams asking whether any candidate who becomes President would pledge to be the President who knocks cancer down from the status as number one killer of Americans under the age of 85. Senator Clinton’s answer was:

“I’m going to do everything I can to do that. I went to Lance Armstrong’s cancer symposium in Iowa and it was a very moving experience — not only people like us speaking but a lot of cancer survivors, a lot of researchers. It’s just outrageous that under President Bush, the National Institutes of Health has been basically decreased in funding. We are on the brink of so many medical breakthroughs, and I will once again fund that research, get those applications processed, get those young researchers in those labs to know that we’re going to tackle cancer and try to do everything we can to drive its death rate down.”

The first mistake was factual in her accusations that under President Bush, the NIH has been decreased in funding. The facts are that since 2001, cancer research funding has increased by 26 percent at the NIH. Further, partly as a result of this, 2006 was the second consecutive year there was a drop in cancer deaths in the United States.

Senator Clinton’s bigger mistake was to introduce politics into cancer prevention and research. If ever there was a bi-partisan cause, searching for new and improved approaches to preventing and curing cancer would be at the top of the list. And political leaders of both parties (e.g. Senators Specter and Feinstein) have joined hands in support of these efforts.

I speak with some personal experience, as my wife Marlene and I have supported and funded a range of cancer research, prevention, and treatment causes. Marlene serves on the Board of the Duke Comprehensive Cancer Center, the Board of Visitors of the M.D. Anderson Cancer Center, and the Cancer Board of the Mayo Clinic. She is also President of Friends of Cancer Research, an organization co-founded by Marlene and Chairwoman, Ellen Sigal (a dedicated Democrat). For their work on Friends of Cancer Research, Marlene and Ellen were named Washingtonians of the Year by Washingtonian Magazine, two years ago.

Marlene and Ellen’s success and my commitment have been bolstered by their bi-partisan approach in the belief that cancer is a dread without political boundaries. Politicizing this issue can only be detrimental to the ultimate goal of eradicating this disease.

As an aside, I had lunch yesterday with former White House Press Secretary and cancer survivor, Tony Snow. Thanks to successful treatment, Tony is more vibrant and energetic than ever. We will be privileged to be in attendance Saturday night when he receives the 2007 Lombardi Symbol of Caring Award as a testimony to the extraordinary strides he has made in encouraging cancer research, prevention, and treatment through awareness and philanthropy.

Today’s Washington Post has as its lead in the Business Section, an article on 34 year old David Marriott, Bill Marriott’s youngest son.  The article discussed the major sales reorganization David is leading at Marriott and quotes me as an owner of Marriott hotels:

“A regional sales approach will definitely have greater appeal to the clients who we must ultimately serve and therefore should increase brand preference,” said Fred Malek, a former top executive at Marriott who owns several of the company’s hotels. “But it also has to be blended with consideration for the profit/loss interest of individual general managers in a diverse ownership group.”

This is a good article about a fine young man, who may indeed one day follow in his Father’s footsteps and head Marriott International.  However, the article only touches on what is one of the core characteristics of humility shared by both Bill and David Marriott.  This humility has earned them deep respect as well as affection.  There is no swagger, no pronouncements from on high.  In my eight years as President of Marriott Hotels, reporting to Bill Marriott, he did a lot of listening, careful to acknowledge and in many cases defer to the expertise of executives in various specialties.  He listened, learned, made the right decisions, and rallied people around these decisions.  It was a lesson in leadership, it was an exhibition of humility, and it demonstrated how humility and consensus building can strengthen leadership and produce results.

David has inherited these characteristics of his Father, and in my view they are a large part of the reason for his past success and promising future.

Joe Torre should have taken the deal!

After 12 years as manager of the New York Yankees, and twelve post season appearances and four World Series titles to his credit, Joe Torre yesterday turned down a one-year contract to continue. The reason as reported in the Washington Post was because of a pay cut from $7.5 million to $5 million, which as the Post reports is still the highest in Major League Baseball.

Well, in my view it wasn’t a pay cut. Rather, Yankees’ ownership took a page out of the pay policies that the smartest companies are adopting – pay for performance. The contract included incentive bonuses of $1 million if the Yankees reached the playoffs, another $1 million if they made it to the American League Championship Series, and a further $1 million if they reach the World Series. Add it all up and it’s $8 million, an actual increase. What’s wrong with that? Let’s compare Torre’s pay with that of other manager who have won titles recently. The baseball fan site The Red Sox Times lists the pay of all MLB managers for the ‘07 season. Turns out that with an ’07 salary of $7.5 million, Torre is already getting paid more than three times as much as Boston Red Sox manager Terry Francona ($1.65 million), Chicago White Sox manager Ozzie Guillen ($1.1 million), and Los Angeles Angels manager Mike Scioscia ($2 million).

As the highest paid manager in baseball – and perhaps in the history of the game – and with the highest payroll in Major League history, why not agree to incentives vs. guarantees, as do most of the corporate world and many in sports? In my view Yankees ownership acted responsibly, and I wish this great manager had agreed to return. The world of sports and baseball has lost (hopefully for only a short time) a legend.

On a related note, contrast the Yankees with the Washington Nationals, who operated with one of the lowest payrolls in baseball and a rookie manager, Manny Acta. When I led the group partnered with the city to bring baseball to Washington, it was my dream to see a team developed from the ground up along the lines of the Cleveland Indians and Colorado Rockies. That’s what Manny Acta and Jim Bowden are doing under the able leadership of team President Stan Kasten – and at a fraction of the cost in management and players. I like what I see there and look forward to the day they enter post season competition.