Lung Association Disbanding Affiliate

Sale of Regional Headquarters, Alleged Policy Violations at Issue

SEATTLE -- The American Lung Association is dissolving its Northwest affiliate and wants the rogue group to hand over ownership of its multimillion-dollar Seattle headquarters, which it sold for $10.

The national charity sent a cease-and-desist letter to the American Lung Association of the Northwest, the ALA said Friday. The affiliate represents the organization in Alaska, Washington and Idaho.

The letter demanded that the regional affiliate stop using the American Lung Association name, turn over its financial assets and take steps to get the building back. The national group, founded in 1904, had notified the affiliate in September that it had 30 days to address alleged violations of the organization's policies.

"We took these steps in order to protect these assets, which were intended for the purpose of advancing the mission of the American Lung Association," Carrie Martin, a spokeswoman for the national association, said in an e-mail.

At the heart of the dispute is the sale of the Northwest affiliate's $3.2 million Seattle headquarters to a corporation, set up by the affiliate's chief executive, without permission from the national organization.

The building was originally bought by the ALA's Washington branch, which later merged with state groups in Alaska and Idaho. The Northwest affiliate is listed as the building's owner.

But real estate records show that the affiliate sold the building to the Pacific Northwest Lung Cancer Foundation for $10 in August. The affiliate, whose office is in the building, then paid $600,000 for five years of rent to the lung foundation, Mike Alderson, chief executive of the affiliate, said in a deposition.

In early October, the national group obtained a temporary restraining order barring Alderson from violating the operating agreement that governs the relationship between the two organizations. The agreement says affiliates must "hold all their funds and other assets in their own names."

The ALA also said Alderson tried to change the affiliate's mission statement from that of the parent organization. The change never took place because the affiliate's board and the national organization did not give approval.

The ALA also says that Alderson forbade his staff members from speaking to the national group, hindering day-to-day operations of both organizations.

Alderson said in a court declaration that he requested that calls from the national organization be routed to keep it from "meddling."

The sides failed to reach agreement during mediation this past week in the District.

Alderson said he and two other "concerned community members" established the lung foundation in case the national organization tried to dissolve the operating agreement. Court documents indicate that some board members were concerned that the group's financial problems would lead to the national organization seizing control.

Laird Harris, chairman-elect of the Northwest affiliate's board, did not respond to a call seeking comment, but before entering mediation, he cited "sound business reasons" for transferring the building.

"The ALA and the ALA-NW have had a long, stable relationship covering a period of decades," ALA Chairman Steve Nolan said in a court declaration. "That changed abruptly . . . when Mike Alderson took over" in June.

Alderson did not return a call for comment.