Creditors and Feds Object to Crystal Cathedral Salaries

The U.S. Trustee Program and creditors are objecting to salaries given out by the Crystal Cathedral to several of its employees as the Garden Grove, Calif., megachurch undergoes bankruptcy proceedings.

The latest filing by creditors on Thursday questioned the church's request to continue employing William Gaultiere, part-time pastor of Spiritual Formation Ministries and son-in-law of Chief Financial Officer Fred Southard, as the bankruptcy case is under review. Gaultiere receives a salary of $61,955 plus benefits, with over 95 percent of the total amount coming in the form of a housing allowance, the Los Angeles Times reported.

Earlier this week, a federal authority overseeing Crystal Cathedral's bankruptcy case and creditors filed objections to the salaries of three of the church's employees for what appeared to be redundant duties. Two of the names listed are related to the church's founding pastor, Robert H. Schuller.

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Names of several other family members who work at the church were also listed in the filings.

The trustee questioned the $132,019 housing allowance for Southard, who takes only a $12,000 salary, the $70,000 compensation for Schuller's youngest daughter, Gretchen Penner, who produces the church's "Hour of Power" telecast, and the $55,000 salary of her daughter, Neva Klaassen, who books musical guests for the TV show, according to the Orange County Register.

"There is no justification whatsoever for a housing allowance of this amount," court documents state. "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."

Jim Penner, Schuller's son-in-law and wife of Gretchen, defended their compensations this week, noting that Southard's tax-exempt housing allowance was a "benefit of working in a church," reported the Orange County Register.

Penner also told the paper the decision by the church to employ family members was more about hiring employees that can carry out the church's cause.

"If anyone looks at these people's resumes, and qualifications, there will be no questions asked," he said.

The Crystal Cathedral, formerly known as Garden Grove Community Church, was founded by Schuller in 1955. The church filed for Chapter 11 bankruptcy protection Oct. 18, citing debts of more than $43 million.

Before that, the church's founder tried to cut expenses by taking a 50 percent pay cut. He announced in August that he and his family would take half their regular salary for a couple of months while other employees would take a 5 to 10 percent pay cut as they try to compensate the vendors whose services they employed during the 2009 "Glory of Christmas" production. While the bulk of the debt is their mortgage to the campus, what triggered the Chapter 11 was the $7 million debt to the vendors. Creditors filed lawsuits after the grace period for paying the vendors expired.

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