The notion that churches pay excessive salaries and benefits to pastors and staff sounds delusional. In fact, excessive compensation is a relatively rare occurrence. But when it happens, excessive compensation often becomes public, scandalous, and potentially damaging to the reputation of the church as a whole. Huge houses for ministry leaders, air-conditioned houses for their pets, fleets of fancy cars, and a general lack of financial transparency tends to get the attention of certain people—including the media, federal regulators, and United States senators.

Federal inquiries

In 2007, Sen. Chuck Grassley (R-Iowa) launched an investigation into the financial practices of six high-profile media ministries. The summary of the probe noted that tax provisions affecting churches and religious organizations had not been updated in decades and that many of the same financial accountability issues that were raised in past scandals still exist.

"While the majority of churches and religious organizations operate with policies and procedures that make them accountable to their members, it is the small minority that don't that are subject to scrutiny by the members and the public, including the press," the report said.

No allegation of criminal wrongdoing was made against any of the six ministries. However, Grassley's original investigation has entered a second and more general examination of the self-governance of ministries and nonprofit organizations. This examination will look into a variety of financial issues, including excessive compensation.