From Wikipedia:
"In 2005, a promotional video which showed SpongeBob along with other characters from children's shows singing together to promote diversity and tolerance, was attacked by an evangelical group in the United States because they saw the character SpongeBob being used as an advocate for homosexuality. James Dobson of Focus on the Family accused the makers of the video of promoting homosexuality due to a pro-homosexual group sponsoring the video.
The incident led to questions to whether or not SpongeBob is homosexual. Creator of the character, Stephen Hillenburg, had previously denied that SpongeBob was gay in 2002 when SpongeBob's popularity with gay men grew. He clarified that the character is asexual. After Dobson made the comments, Hillenburg repeated this assertion that sexual preference was never considered during the creation of the show. Tom Kenny and other production members were shocked and surprised that such an issue had arisen.
Dobson later asserted that his comments were taken out of context and that his original complaints were not with SpongeBob, the video, or any of the characters in the video but with the organization that sponsored the video, We Are Family Foundation. Dobson indicated that the We Are Family Foundation posted pro-homosexual material on their website, but later removed it. After the controversy, John H. Thomas, the United Church of Christ's general minister and president, said they would welcome SpongeBob into their ministry. He said 'Jesus didn't turn people away. Neither do we'"
Source(s):
http://en.wikipedia.org/wiki/SpongeBob_SquarePants_%28character%29

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And what if he is? And the problem would be?
Live and let live folks.
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Dobson is an idiot. Period.
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