Awhile back I wrote a post called "Zen Police" that alluded to the Eido Shimano scandal. Well, now there's a detailed article about it in the New York Times, by Mark Oppenheimer, "Sex Scandal Has U.S. Buddhists Looking Within."
The details of the Eido Shimano scandal, as far as I know them, are accurately presented in the article. Oppenheimer also correctly points out that many Buddhist institutions in the West are in an awkward phase -- they aren't really Asian any more, but neither do they fit standard western models of religious institutions.
The issue discussed in "Zen Police" and in the Oppenheimer article is, basically, what does a lay sangha do when the head teacher is misbehaving -- sexually, financially, or any other way?
If there's one clear lesson from the Eido Shimano scandal, to me, it's that a dharma center's management should have some independence from the head priests and teachers. A board of directors elected by members ought to be able to decide "what sins are too great to countenance, and what kind of discipline is needed," in Oppenheimer's words. I don't know if temples/centers in Asia ever operate that way, but in the West there are models for this in many Jewish synagogues and Protestant Christian churches.
One quibble I have with Oppenheimer's article is that he suggests the student/teacher relationship in Buddhism doesn't operate with the same boundaries common to, say, psychotherapists or doctors. In Zen, there really are some boundaries that have long been part of the tradition. The face-to-face work between student and teacher is not supposed to delve into every private detail of the student's life, for example, but to remain focused on spiritual issues.
I understand that one of the many issues underlying the Richard Baker Roshi scandal at the San Francisco Zen Center was that Baker Roshi didn't keep those boundaries and knew everybody's secrets. That in turn created many subtle ties that made reining in the wayward teacher all the more difficult.
As others quoted in the article pointed out, part of the awkwardness in Zen came about because Asian teachers were not accustomed to teaching women. Perhaps. I've been told also that in paternalistic Japan, sexual relationships between male teachers and female students are politely ignored. But I've never lived in Japan, and I cannot say from my own experience that is true.
However, I do think Zen in the U.S. has matured to the point that teachers are no longer looked up to as magical, perfect beings. Many are remarkable, but they are still human.