Back in 2007, U.S. Sen. Charles Grassley (R-Iowa) got concerned that some evangelical mega-ministries might be abusing their tax-exempt status by doing things like giving employees enormous salaries and housing allowances as well as ownership of huge houses, private jets and fancy cars. He requested information from six ministries, but little came of the effort because four of them flat-out refused to cooperate.

Most Americans don’t like the idea of government regulating religious groups, but one could understand Grassley’s concerns. When TV preachers who head tax-exempt nonprofits live in a string of mansions and pay enormous salaries to themselves and their family members, something is not quite right.

Unfortunately, the effort went off the rails. Grassley investigators with the Senate Finance Committee produced a report that, for some reason, strayed into other areas. One of the arguments they made was that the federal tax law ban on pulpit politicking should be lifted because “the game is not worth the candle.”

Americans United was taken aback by this strange twist in the investigation.

“I have to wonder what these Senate staffers could possibly be thinking with this breathtakingly wrong-headed suggestion,” Barry W. Lynn, Americans United executive director, said at the time in a press statement. “It’s a sign that this investigation has gone seriously off course.”

Grassley’s office asked the Evangelical Council for Financial Accountability to examine some of the other issues. The Council formed a Commission on Accountability and Policy for Religious Organizations (CAPRO), which has just issued a report.

Not surprisingly, CAPRO doesn’t see the need for more oversight.

The group’s report recommends no changes to rules that allow religious non-profits to easily get around restriction on excessive compensation for leaders. It also calls for no changes on the dollar amount of non-taxable housing allowances for clergy, and it insists that houses of worship must be free from filing financial disclosure forms that secular non-profits must file.

During the original investigation, a proposal was floated that the IRS set up an advisory committee for religious organizations and consult third-party organizations (such as the Evangelical Council) when deciding which churches to audit. AU strongly opposed this idea, arguing that it would give evangelical churches undue influence in dealings with the tax agency. That’s about the only thing of value that has come out of this report.

Basically, after a process lasting more than five years, the group is calling for the status quo.  

But this isn’t over yet. CAPRO added that, for undeclared reasons, it would make a separate report in 2013 on whether to change rules that prohibit houses of worship from engaging in partisan politics. AU will monitor this process closely and strongly resist any effort to change the law to allow for church electioneering.

Five years later, it’s not entirely clear what Grassley hoped to find when he started this investigation. What is clear is that it went off in the wrong direction. Rather than changing the rules of the game, the IRS needs to enforce the rules of the game – especially when it comes to political activity. It would certainly be worth Grassley’s valuable time to focus on that.