Employee Pay Questioned During Crystal Cathedral Bankruptcy Proceedings

GARDEN GROVE (AP) — Federal authorities were questioning the compensation packages of three employees of the Crystal Cathedral as the Orange County megachurch goes through bankruptcy proceedings.

The U.S. trustee overseeing the church’s bankruptcy filed objections in court over a six-figure housing allowance for its chief financial officer and the salaries of two relatives of founding pastor Robert H. Schuller, according to media reports Wednesday.

The U.S. trustee overseeing the bankruptcy of the megachurch filed objections in court questioning the need for $132,019 as a housing allowance for CFO Fred Southard, whose salary is just $12,000, the Orange County register said.

“There is no justification whatsoever for a housing allowance of this amount,” the court documents said. “Mr. Southard has failed to explain why such a housing allowance is necessary or appropriate, given this debtor is in Chapter 11 and suffering financial difficulties.”

The housing allowance is set aside for ministers and is exempt from federal taxes.

Southard defended the compensation package Wednesday, saying the church ordained him as a minister about 10 years ago and he has sometimes acted in that capacity.

“That’s what ministers are allowed to do, and so it’s to the individual’s advantage to do that,” Southard told the Los Angeles Times. “I doubt that many would spend what I do, because most people don’t live in the area I do.”

Southard, the church’s CFO since 1978, owns a home in Newport Beach worth $2.3 million, the Times said.

The trustee also questioned the need for a $70,000 annual salary for Schuller’s youngest daughter Gretchen Schuller Penner, who produces the church’s “Hour of Power” telecast, and the $55,000 salary of her daughter Neyva Penner Klaassen, who books musical guests for the TV show.

Cathedral attorney Marc Winthrop declined comment when reached by the Register.

The church, founded in the mid-1950s by Schuller, filed for Chapter 11 bankruptcy protection Oct. 18, citing debts of more than $43 million.

The church has ordered major layoffs, sold property and canceled its annual “Glory of Easter” extravaganza.

(© Copyright 2010 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

  • lho

    This ministry is a rippoff. Taking advantage from the church goers and the government

  • MMcK


  • Robert S.

    Lots of trouble with the humanbeing, greed and dishonesty, and its a shame that people abuse the priviledge of people’s trust in the name of God, although this seems to happen alot. The abuse will continue, because people can’t see the real motives and refuse to. Great way to make a good living off of people if you don’t have any feelings for the victims!

  • ReginaM

    Is this more of their “biblical accounting?”

  • CA562DUDE

    This is why I have never belived in god and dont EVER goto church… Church people(s) are the worst in the world “TWO-FACED LIERS” they are wrost than any Criminals, they do stuff that is soooo wrong and say “ITS GOD WILL” get real out there…

  • Deborah Lynn Andelin

    It is really those individuals who provided the Church with their animal props for their shows and how they have been left in debt because of this Church. It is a shame that the vendors and their animals that are left homeless. Thank You Crystal Cathedral.

  • Carrie Lacelle

    Hey if they sold off some of what they have labled “the million dollar Bathroom” Mabe they could afford more!

  • CA562DUDE

    Hey Carrie, does “Jim Bakker” comes to mind ???? all this happening again dont you think…

  • B Parker

    Disapointing! However, Like any business. It needs to clean house! No favortism. Robert H. needs to stand his ground, and prove that his faith in almighty God, is true. I hope the best for him, as he has inspired thousands over the years. Maybe even close to a million. Sometimes one can bite off more they can chew. Pray for him! Pray for his family! A great legacy is at stake! Don’t submit negative comments, as they only bring negative re-actions.
    Pray hard! Keep your faith! Believe!

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