While not a government agency, its leadership by two former presidents gives the Bush-Clinton Katrina Fund Panel quasi-political ties—and recent action illustrates the sticky situation of church-state relationships.

Suddenly, this highly-publicized panel is without most of its preachers after seven of the nine religious leaders resigned last week from the Washington-based fundraising group. Their pique followed decisions conflicted with their recommendations regarding the distribution of some $20 million for rebuilding hurricane-damaged churches in the Gulf region.

According to the Associated Press, Rev. T.D. Jakes of The Potter's House in Dallas and Rev. William H. Gray III, pastor of Bright Hope Baptist Church in Philadelphia and a former congressman and one-time president of the United Negro College Fund, said the last straw was the fund's decision to cut checks of $35,000 to 38 houses of worship. The religious leaders had recommended grants of up to $200,000. Jakes also told AP the Fund ignored their requests for auditing churches requesting grants.

Imam Abdelhafiz Bensrieti, another committee member who resigned, said the Washington staff wanted the religious leaders to "rubber stamp" their decisions. "They had their agenda and that's unacceptable," Bensrieti said.

The Fund's executive director, Mary Ann Wyrsch, also quit following the multiple resignations of the faith leaders.

Of the nine religious leaders serving on the committee, so far only one has indicated he will continue serving on the committee: the Rev. Fred Lucas, president of the Faith Center for Community Development in New York.

The other remaining member, Catholic Archbishop John C. Favalora of Miami, has been on vacation for the past several weeks and is most likely not aware of the turmoil, a spokeswoman for the archdiocese told AP.

Of the $20 million earmarked for houses of worship, so far just $1.5 million has been awarded, although the Fund says the rest is due to be dispensed this summer. During the past six months, a total of $65 million has been awarded to schools, colleges, community groups and state programs intended to help people along the Gulf Coast rebuild their lives.

Meanwhile, according to the Bush-Clinton Katrina Fund, applications are being accepted through July 31 for rebuilding houses of worship and will be reviewed and granted as they are submitted. The majority of the board is gone, but the majority of the money remains.

Know any churches that should submit a grant proposal? Blog here.