NO. 92-465 IN THE SUPREME COURT OF THE STATE OF MONTANA 1993

IN RE THE PETITION OF ROBERT G. STEELE

APPEAL FROM: ORIGINAL PROCEEDING

COUNSEL OF RECORD: For Appellant: Larry M. Elison, Attorney at Law, Missoula, Montana For Respondent: K. Paul Stahl, Attorney at Law, Helena, Montana

Filed: Submitted on Briefs: August 5, 1993 Decided: December 22, 1993Justice Fred J. Weber delivered the Cpinion of the Court.

PetitionerRobert G. Steele appeals fromthe final decisionof the State Bar of Montana Committee on Character and Fitness (Committee) refusing to certify petitioner to this Court for admission to the State Bar of Montana. We affirm the decision of the Committee. The sole issue presented is whether the Committee properly concluded that Mr. Steele is unfit topractice law in the State of Montana. Robert G. Steele (Steele) submitted his application for admission to the State Bar of Montana on November 15, 1990, intending to take the February 1991 bar examination. On December 26, 1990, after a reviewof his Character and Fitness application, the Committee sent a letter to Steele advising him that it had "serious concerns" about his convictions for driving under the influence (DUI)and tax liensand requested that Steele provide the Committee with DUI records and dispositions, copies of Internal Revenue Service (IRS) deficiency notices and copies of his responses to the IRS. The Committee also noted that Steele had applied to take the February 1991 exam but would not be graduating from theUniversity of Montana School of Law until the spring of 1991. Steele was asked to submitawritten explanation of why he had applied to take the February examination when he would not have fulfilled the graduation requirementuntil June. Steele responded by telephonethat he had applied fora facultywaiver for a required one-credit

course which he had attempted to replace with an "independent study"project. He stated thathewould not knowuntil February 4, 1991, whether the faculty would grant his request for a waiver. After the faculty denied his request forwaiver, Steele requested that the State Bar allow him to take the examination without meeting thegraduation requirementand hewas advised that thiswas not possible without permission from this Court. On February 13, 1991, the committee met to review Steele's application and decided not to certify Steele for the bar examination and admission due to the concerns previously noted. The Committee advised Steele that he could appear in person for an informal hearing regarding the decision. Steele accepted. The Committee's positiondid not change followingthe informal hearing. The Committee was particularly concerned with Steeleis interaction with the IRS. Steele is a Certified Public Accountant licensed to practice in Montana and is thus conversant with IRS regulations and procedures. Steele did not file timely personal incometax returns for taxyears 1982 through 1986. With penalties and interest added,Steele'spersonal tax liability to the IRSwas greater than $208,000at the time of the informal hearing. Steeleprovided anauthorization fordisclosureandwaiver for the Committee's use in obtaining relevant information fromthe IRS. He also submitted numerous documentsto theCommittee demonstrating his tax protest activities in the early 1980s. Most of these documents consisted of correspondence to and from members 

### of theMontana Congressional delegation. During the time between the request for the informal hearing and May 1, 1991, the date of the hearing, Steele made offers in compromise forhis tax liability,offering slightly more than 1% in compromise of his federal and state taxes owed. At the hearing, Steele presented copies to the Committee of his written offers to these agencies and discussed his difficulties with the IRS inmore detail: I have an offer and compromise that Imailed off to the federal government for all the back taxes. I don't know if they will accept this offer and compromise,but it's the first time that I have been able to offer anything. I am only offering what I can afford to pay here. I am in hopes that if they don't accept this offer, another one can be worked out. And here is the same thing with the state of Montana. I have sat down and I have talked to these people. I have met with the Internal Revenue agents. They understand. They have no gripewith me. As a matter of fact,they offered to

## --They wanted me togo towork for them, and Ihave agreed to do work for them. They told me they will pay me for bothmy time andmy expenses,and I have agreed to do that. I have to assume from that that they have a certain amount of trust in me as well. Steele responded to additional questions from Committee members pertaining to his tax liability and his tax protest activities,includingquestionsconcerninghis involvement with the Golden Means Society, a group which advocated not filing tax returns on the basis of constitutional rights and which no longer exists. He testified as follows: MS. BRANDBORG: In working with those people in the Golden Means Society,when peoplewould come toyou as an accountant and ask your advice, what type of advicewere you giving, and did it essentially follow the same pattern that you followed in refusing to pay taxes?MR. STEELE: 

# . . . We didn't refuse to pay taxes. We refused to filea return with the informationthatwas on there. The answer to your question is, no, I didn't get into a professional advisory capacity,unless itwas in the realm of my expertise in the tax law. And there was a lot of that, an awful lot of that. In fact, I primarily was preparing tax returns for people who hadn't filed for a while. I was preparing these returns through their records and getting them up to date, currently. I,myself, wanted to find out what basis there was to a lot of the constitutional challenges; and I wrote those letters and took those stances. "Example only,** I wrote on the first return that I filed, requesting assistance;and I got quite a few answers fromdifferent senatorsthatwere encouragingourposition atthat time. Steele testified that in 1987, after certain tax reform legislation was enacted, he finally filed returns for the years 1982-1986. He stated that after numeroustax court appearances,he

was convinced that his taxprotest methods were not going to work. He also testified that he felt his efforts had been helpful in changing the tax laws. At the request of the Committee, Steele provided an authorization to disclose information about his income tax and "othermatters" for taxyears 1982 through 1990 and his permission to discuss an "Agreement toAssist IRSt* with Larry Huggins,an IRS investigations officer from the M~SSOU~~ IRS office. The District Counsel for the IRS in Montana responded in writing to the Committee's request for information, stating that the IRS opposed Steele's admission to the State Bar of Montana. The letter also stated that a memorandum had been circulated to IRS employees in Montana asking for their input regarding the request and that several memoranda were received in response from IRS employeeswhohad dealt with Steele and copies of such were attached to the letter. TheCommitteealsowas informed that Steelehad never been employed by the IRS,but thathe had agreed towork with the IRS in a special capacity and that he had provided such services to the IRS. The letter noted the following about Steele's dealings with the IRS: (1) that he had been a member of the Golden Means Society which advocated violation of the tax laws; (2) that he failed to timely file income tax returns fortax years 1982 through 1986 and only filed them after entering law school: (3) that his tax liability was in excess of $200,000and that he had made no effort topay any of the taxeswhen he was earning a substantial salary as

a CPA; (4) that he encourages his clients to ignore the IRS Examination Division during its audit procedures and to request conferenceswith the Appeal's Division without a meaningful audit and delays resolution of cases pending before the Tax Court until the eve of trial,a tacticwhich he apparentlybelieveswill obtain more favorable results for his clients; and (5) that his actions indicate that he does not believe he is required to follow the Internal Revenue laws of the United States. One of the attachments to the letter stated that Steele had been the subject of two IRS criminal investigations in the 1980s, although each case resulted in a decision by the IRS not to prosecute. This was the first knowledge the Committee obtained about the criminal investigations. One of the criminal investigations, in which Steele was designated a co-conspiratorbecause ofhis affiliation with theGolden Means Society,concerned

an alleged conspiracy to impede and impair the IRS in assessment and collection of taxes. Steele testified that he did not timely file the tax returns because a taxpayer under criminal investigation is not required to file returns until the investigation is resolved. Steele refused to voluntarily file tax returns other than "5th amendment constitutional"tax returns until his criminal

case was resolved. The IRS does not consider these to be actual returns as they do not list income and deductions. The second criminal investigation centered around Steeleis failure to pay taxes due and owing for 1982 through 1986 after he filed the actual returns in 1987. Although the IRS suspected that Steele had transferred property and filed false financial statements with the IRS to preclude paying taxes, the IRS later determined that Steelehad not falsified any documents or secreted away funds in order to avoid paying the IRS and that Steele had spent all his funds for personal reasons rather than making estimated tax payments. The revenue officer handling Steeless returns noted that she had "minimal cooperationw from Steele. In a letter dated August 9, 1991, Steele responded to the information disclosed by the IRS. On August 23, 1991, the Committeeprovided formalnotice to Steeleby certifiedmail of its denial of certification for admission to the State Bar of Montana. The Committee stated the following as reasons for denial: Unlawful conduct, as evidenced by your DUIs and your failure to pay taxes; Making of false statements including omissions as shown 7by your failure to disclose the IRS's criminal investigationsof your activities; Abuse of legal process as reported in IRS District Counsel's letter of July 26, 1991; Neglect of financial responsibilities as shown by your tax liens; and Neglect of professional responsibilitiesas evidencedby your failure to adhere to the tax laws even though you are fully aware of them in your capacity as a CPA. Pursuant to the Rules of Procedure of the Committee on Character and Fitness,Steele formally responded to each of the five reasons given by the Committee for denial of certification and filed a Request for Reconsideration and Hearing. A 

### reconsideration hearing was held on March 5, 1992, to ailow Steele to present evidence to support his application for admission. Prior to the hearing, Steele provided additional information to the Committee, including letters and affidavits in support of his application for admission and notice that his offer of compromisehad not been accepted by the IRS. Steele also had a chemical dependencyevaluation performed on September 19, 1991 and had the evaluation results forwarded to the Committee. After thehearing, Steele was allowedtodepose two additional IRS employees, submit additional interrogatories to one of the witnesses at thehearing and to submit other additionalmaterials. On July 22, 1992,the Committee met to review Steele's application and again denied his application. Formal findingsand conclusions

were issued on August 24, 1992. Steele challenges several of the Committee's findings and conclusions. Further facts will be provided as necessary throughout this 8opinion.

Did the Committee properly conclude that Mr. Steele is unfit to practice law in the State of Montana? The rules for admission to the State Bar of Montana provide that the burden of proof is on the applicant to demonstrate good moral character and general fitness to practice law in an appeal from a decision of the Committee on Character and Fitness of the State Bar of Montana: EveryApplicant for theMontana Bar examination shall be of good moral character. The applicant shall have the burden of proving by clear and convincing evidence that he or she is possessed of good moral character. The Committee shall certify the Applicant totheClerk of the Supreme Court unless prlor or present conduct of the Applicant of which the Committee becomes aware would in the opinion and discretion of the Committee cause a reasonable person to believe that such Applicant would, if admitted to practice law in Montana, be unable or unwilling to act in accordance with the standards set forth in the Montana Rules of Professional Conduct, fairly, discreetly, honestly, reasonably, and with unquestionable lntegrity in all matters in which he or she acts as an attorney at law. Rules of Procedure of the Committee on Character and Fitness

(1991)

### , Section 3(a) (as amended June 9, 1992); now Section 4(a) (amended March 25, 1993). The standard of review used by this Court in reviewing Committee decisions to deny admission and certification to take the Montana bar examination is as follows: Upon reviewing a final decision of the Character and Fitness Committee we will conduct an inde~endent review of theentirerecord todetermine if theCommitteeerred. When the factsare admitted and uncontested,as they are in this case, we will give due consideration to the inferences drawn by the Committee, including inferences concerning rehabilitationandmitigation. Consideration will be given to the recommendation of the Committee as 

### towhether the 

### applicant is of 

### the requisite good 

### moral character and fitnesstobe admitted to the Montana Bar.The Committee will have heard testimonial evidence and will have had theopportunity toobservethedemeanor and judge the credibility of the applicant or other witnesses. However, inasmuchas we aredesignatedby the Montana Constitutiontoultimately make thisdecision,we will affirm the Committee's recommendation if we determine it was correct, and we will reverse if we determine the Committee erred. Our review will be in accordance with the existing standards for admission, takinq into consideration the whole record. In re the Matter of Matt (1992), 252 Mont. 345, 348-49, 829 P.2d 625, 626 (emphasis in original) (quoting In re the Matter of Pedersen (1991), 250 Mont. 325, 328-29, 820 P.2d 1288, 1290). Although the Montana Constitution gives this Court exclusive authority to regulatebar admissions inMontana, such authority is subject to the limits imposed by the United States Constitution. The United States Supreme Court has held that, in making determinationsof an applicant's character and fitnesstopractice law, the applicant must be afforded adequate due process of law. Willner v. Committee on Characterand Fitness (1963), 373 U.S. 96, 83 S.Ct. 1175, 10 L.Ed.2d 224, The Court stated in Willner, 373 U.S. at 107, 83 S.Ct. at 1182, 10 L.Ed.2d at 232: [I]n all cases in which admission to the bar is to be denied on thebasis of character,the applicant,at some stage of the proceedings prior to such denial, must be adequately informed of thenature of the evidence against him and be accorded an adequateopportunityto rebut this evidence. Steele contends that he was not afforded due process because he either did not receive notice of the Committee'sbases for its decision, or he received notice after the hearings. He also contends that due process was not afforded him because supporting documentation was either absent or based on constitutionallyprotected activities which Steelehad engaged inprior toattending law school. In support of his claim that he did not receive due process, Steele contends that the Committee did not identify the evidence againsthim; specifically,the Committeedid not identify or allow him to address omissions in his application and did not identify any false statements, even in the final decision. He also claims that the Committee did not follow consistent rules of evidence. We first note that the Committee is not bound by formal rules of evidence and may, in its discretion, take evidence in other than testimonial form, having the right to rely upon records and other materials furnished to the Committee in response to its request forassistance in its inquiries. The Committeemay, in its further discretion, determine whether evidence tobe taken intesuimonial form shallbe taken in person at the hearing or upon deposition, but all testimonial evidence shall in either event be taken under oath. A complete stenographic record of the hearing shallbe kept,and a transcriptmay be orderedby theApplicant at theApplicant's own expense. Rules of Procedure of the Committee on Character and Fitness,Rule 5(i) (March 25, 1993). Steeletsobjection here seems to center around the evidence suppliedby IRS employees aspreviously set forth in this opinion; he states that their "inability to specify either because of confidentiality or lack of memory leaves 

# . . . Steele in an informationaland evidentiarywasteland." Therefore,Steele claims that the Committee's findings should identify the portions of the record which the Committee relied on to support each finding to prove that it did not rely on improper evidence. Because of theindependent character of our review,such detailed fact-finding is unnecessary. From our review of the entire record, we find evidence to support the Committee's findings as set forth in the following discussion. One of the reasons for denying Steele's certification is that Steelemade false statements inhis application. False statements include omissions. Thus, Steele's argument that the Committee failed to identify any actual false statements isnot relevant. We focus on the omissions in Steele's application. The application form asks the applicant to list any civil proceedings inwhich the applicanthas been a party. In answering this question, Steele disclosed that he had sued a client in 1978 for nonpayment of a fee for professional services, yet he did not disclose a more recent civil suit against the IRS which had proceeded to theNinth CircuitCourt ofAppeals. More importantly, Steele did not inform the Committee about two criminal investigations that the IRShad initiatedagainsthim in the 1980s. Moreover, despite providing the Committee with a two-inch sheaf of paper after the Committee inquired intohis dealingswith the IRS, Steele continued to withhold information about the criminal investigations. The Committee found out about the criminal investigations from the informationdisclosed by the IRS

### after the informal hearing. Steelecontends that because the application foradmissiondid not specifically request him to list any known criminal investigation, it cannot be an omission to fail to include thatwhich isnot specificallyrequested. However, theapplication does require an applicant to disclose any other informationnot already givenhavina a bearina on characterand fitness. Furthermore,this request is conspicuously located above the applicant's signature line, It would be impossible for the application to ask every conceivable question which would cover the conduct of every applicant. That is one of the reasons for the general query into any other information having a bearing on character and fitness. Steele also claims that since he identified the IRS investigator, Larry Huqgins, as a person with whom he had been in contact, the Committee could then easily find out about the criminal investigations. Steele's reference to Huggins was included in the following written response to a question on the application asking if there are any unsatisfied judqments outstanding against the applicant: I am delinquent on income tax payments. I am current on return filings but owe on past amounts due. This is because I filed late for theyears 1982-1986 in 1987. My original returns for those years were protest returns. Thiswas because, inmy practiceas a CPA, I became aware of severe problems with the income tax system. Some of these problems, as to fairness,have been corrected by Congress in the 1986 Reform Act. I believe that my efforts contributed to the reasons for the mandate President Reagan gave Congress to reform the Income Tax System. Nevertheless, I realize that the taxes are due, owing, and should be paid. I am in contact with Mr. Larry Huggins, IRS Missoula, (406) 329-3681. It is my intention to begin to pay these taxes as I return to the full-time work force after law school. I have provided IRSwith financial statementsandMr. Huggins seemstobe satisfied that this plan will work. 

### A contributing factor to not being able to pay these taxes is that 

### I lost all my Capital in the Stock Marketabout 1983. While this hasdiminishedby ability topay, ithasnothelped thetax problems because Capital losses are only allowed to offset ordinary income to the extent of $3,000.00per year. They are also not deductible for self-employment tax purposes. I have learned however, that IRS has a compromise procedure for situations like this and I intend to utilize that procedure as soon as I have something to offer. The total amount due, both to State and Federal, currently approximates $150,000.00, including penalty and interest. A large portion of this wouldbe currently dischargeable inbankruptcy. Ido

### NOT intend to resort to bankruptcy since the debt is a legitimate result of a mistake I made. Themistake,however,was instrumental in my decision to enter Law School. Ibelieve that I am now equipped with an understanding of law and taxes to allowme to assist clients in this area where few attorney's [sic] wish to specialize. The IRS isno longer an enemy but rather an agency inneed ofguidance froma Congress enlightenedby attorney's [sic] with knowledge and experience in this realm. A system of taxation thatmeets the needs of our government and yet inflicts the least intrusion into the lives of those whopay it shouldbe thegoal of congress. A populace with the expertise available to help them function within this system is the foundation to make it work. My goal is to help stabilize this foundation. In this respect, I pledge to be a better example in the future. This statement is not a candid disclosure of the extent of Steele's tax difficulties. Although it provides Huggins*number, it omits anymention that Huggins investigated Steele for criminal conduct. Further, it states that Steele lost his capital in "about 1983," but it does not explain why Steele did not attempt to preserve funds after that time for future payment to the IRS. Steele further argues that the following finding of fact was not material: 11. The Applicant applied to take the February, 1991, exam, even though he was not eligible; to become eligible he had to receive a waiver from the faculty. Applicantmade no mention of his conditional application until the issue was raised by 

### the Administrative Assistant to the Committee.The record contains a memorandum written by Jan Weber, the Administrative Assistant to the Committee, on December 26, 1990, after questioning Steele about his eligibility to take the exam. It also contains other memoranda indicating that, after Steele learned that he would not graduate until spring semester, he inquired whether he could still take the exam and was advised that thiswould requirepermission fromthisCourt. While this omission by itself may not be a serious omission under the particular circumstances of this case, it is cumulative and, therefore, it becomes material. We concludethat Steelewas adequately informed of the nature of the evidence against him and was afforded an adequate opportunity to rebut the evidence. He knew from the time of the Committee's first letter, dated December 26, 1990, that the Committeehad concernsabout his tax liensand DUIs. After further communication with Ms. Weber and the Committee, Steele knew the Committee was concerned about his ineligibility to take the February examination,heknewtheCommitteewas concerned about his problemswith the IRSand he knewtheCommitteewas concerned about the civil case which he had not disclosed. After the Committee inquired into the tax lien matter, other information from the IRS

was disclosed and Steelewas questioned about this information. He responded to all these concerns either informally or formally. He had access to and reviewed the Committee's complete file. Steele was given adequate opportunity to explain and rebut the evidence. We conclude that the materiality of the omissions wassignificant. Furthermore, Steele did not facilitate information gathering about his dealings with the IRS either in his testimony before the Committee or in other numerous communications with the Committee. The Committee determined that Steele "was neither candid in his application nor before the Committee." The record fully supports this finding. The record also establishes that the Committee gave Steele every opportunity to present evidence and that it treated Steele fairly throughout the post-denial process. Throughout this proceeding, however, Steele's conduct demonstrates an attempt to make light of or to downplay the significance of the factsrelatingtohis tax protest activity,his failure to pay taxes and his interaction with the IRS. In our view, this is a significant basis for the Committee's finding that Steele was neither candid in his application nor before the Committee. The Committee also had the advantage of personal observation of Steele and other witnesses to determine the candor and credibility of each. In addition to finding that Steelehad made Valse statements including omissions," the Committee made a number of additional conclusions with regard to the filingof tax returns and payment of taxes for the years 1982 through 1986. These findings showed that Steele owed the IRS more than $209,000 and had made an offer of compromise of $3,544; similarly, he owed the State of Montana $20,824and had made an offer of compromiseof $381. The Committee found that Steele had never denied the tax was due and owing, that the money which he had for payment of the tax was spent otherwiseand that he acknowledged this was a violation of the law. The key conclusion in paragraph sevenwas that thebehavior showed lack of reasonableness, neglect of financial responsibilities and neglect of professional obligations as an accountant. Following are the conclusions of the Committee on this aspect: 5. The Applicant failed to pay taxes for years 1982, 1983, 1984, 1985, and 1986. Applicant presently owes the [IRS] more than $209,000; he made an offer of compromise to the IRS of $3,544, slightlymore than one percent of theamount owed. Applicant presently owesthe StateofMontana Revenue Departmentmore than $20,824; he made an offer of compromise of $381, which is slightly more than one percent of the amount owed. These offers in compromise were made April 30, 1991, after the Committee made inquiry. TheApplicant never denied that the tax was due and owing; money available to pay a portion of the tax was spent otherwise. Applicant further acknowledged this was a violation of the law 

## .

# .

6. Applicant admitted that failure to pay the tax and failureto file incometaxreturnswereviolations of IRS regulations. 7. Money available for payment of taxes was spent by the Applicant. Such behavior shows lack of reasonableness, neglectof financial responsibilitiesand neglect of professional obligations as an accountant. Applicant was more than 35 years of age and had been employed for more than 15years as an accountant.

13. Applicant's actions in application,hearings, and gathering evidence, show him to be a person of questionable integrity. He shows neglect of financial responsibilities, neglect o f professional responsibilities,andhasmade falsestatementsincluding omissions. Based on Applicant's omissions in the application process and on the evidence adduced in the hearings process, theCommittee findsthat theApplicant lacks sufficientmoral character and if admitted to the practice of law would be unable or unwilling to act in accordance with the standards set forth in the Montana Rules of Professional Conduct, fairly, discretely, honestly,reasonably,andwith unquestionable integrity.Steele contends that the Committee based these findings in part on constitutionallyprotected activities which he had engaged in prior to attending law school. He argues that the Committee could not base any part of its decision on his exercise of free speech for speaking out against the IRS and the income tax laws, that it couid not base any part of its decision on his association with the Golden Means Society because of his right of freedom of association, and that it could not base anypart of the decision on his right of freedom of assembly for his presence in a group of persons assembled toprotest the foreclosureof a family store. We find no evidence that the Committee considered any of these activities inmaking its decision except to the extent that Steele omitted information onhis application or to theextent that hewas not candid in discussing them. From our review of the record,we affirm the conclusionswith regard to the nonpayment of taxes, the offers in compromise,and the other essential elements as above-quoted. From the record it is somewhat difficult to determine if Steele acknowledged that his conduct was a violation of the law. Unfortunately Steele did not give straightforwardanswers to questions asked by the Committee. Following is a portion of his testimony:

MR. SULLIVAN: Letme askyou: Didyouactually sit down and keep figures for your income, for deductions, and compute what a tax would have been in 1982? MR. STEELE: No, Idid not do that. MR. SULLIVAN: Why is that? MR. STEELE: I believed that would never be 18necessary. I believed it was all going to change. I believed that the IRSwas going to see the error of their ways and we were going to have a new tax system. MR. SULLIVAN: And youbelieved that thegovernment was not going to seek to collectwhat they feltwas your legitimate tax due and owing for 1982 on through those years? 

### MR. STEELE: I believed that at some time there would be a settlement. You know, at the time, I was prepared to lose;and at that time, I had somemoney and Iwas investing at that time, At that time, I alwayshad an openmind. If they could show me where we were wrong and convinceme thatwe werewrong, Iwaswilling to file the return; and I had themoney at that time to pay it. MR. SULLIVAN: Maybe my question isn't very clear. I get the impression that back thenyou felt that itwas an invasionofprivacy toprovide all of this information about your earnings and your deductions, but I am a littleunclear. Are you saying itwas a violation of the constitution to tax you? MR. STEELE: Of course not. MR. SULLIVAJ: So did you s-et.asideany.money..tgp.ay tax. or is-jtyou_r..po-s-ition .thatyou..owedno.ta-x?

-. HR. STEELE: NO,no,no. we were wantinq a better form of taxation; not no taxes. I mean, that's ridiculous. A flat tax, like it's been proposed, a national salestax,something likethat,thatwouldn't be an intrusion into privacy. [Emphasis supplied.] I had the money. I didn't put it in a trust fund and keep it aside for the IRS,and I eventually ended up losing most of that money in my investments. At that time, it was not a problem with me that I was going to have to pay these taxes, pay some taxes of some kind. While the record is not as clear as it might be as to Steele's acknowledgement that this conduct was a violation of the law, we conclude there is sufficient evidence to support that conclusion and the further conclusion that Steeleadmitted that the failureto file tax returns was a violation of IRS regulations. The emphasis in the above quote illustrates the difficulty of 19obtaining a directanswer from Steele. In addition,from the above testimony it appears that Steeledid not intend topay the tax owed but intended to settle or "compromise"with the IRS at some future point. When the first criminal investigation was resolved, Steele filed tax returns for the years 1982 through 1984. Because Steele did not keep records of incomeand deductions for taxpurposes,his tax liability is based only on estimated income for those years. The second criminal investigation related to the IRS1s suspicion that Steele had transferred or hidden assets in an attempt to avoid paying the tax due after he finally filed the returns. The IRS did not prosecute this either because it could not determine that Steele had acted improperly. The record demonstrates that Steele neglected both his financial and professional responsibilities. The record also demonstrates that at the time he was refusing to pay taxes,Steele did intend to effect some sort of a compromise for the years in question. The recorddoesnot disclose anywillingness on thepart of Steele to pay the full amount of taxes owed for the years 1982 through 1986. As a CPA, Steele was and is aware of the tax laws and the procedures required in connection with the filing of returns and payment of taxes. We affirm the findings and conclusions of the Committee as above set forth indicating a neglect on the part of Steele of both financial and professional responsibilities. We have reviewed the entire record according to the standardsset forth in Pedersen and in &&&. We conclude that the record supports the decision of the Committee. We further conclude that Steele was afforded due process. We hold that Steele is unfit to practice law in Montana. Affirmed.

Justices

### Justice Terry N. 

### Trieweiler dissenting. I dissent from the majority opinion. After a r of the entire record provided by the Committee for Character and Fitness, I

### conclude that the Committee erred when it denied Robert Steele's application to take the State Bar Examination. Specifically, 

### Iconclude that those findingsof fact relied on by the Committee to support its denial of Mr. Steele's application either lacked sufficient specificity so that they canbe reviewed,

or are unsupported by substantial evidence. The Committee's Finding No. 5 

### to the effect that Steele acknowledged violating the law is incorrect. While it is true that one member of the panel examined him at length for the purpose of establishing that he knowingly violated the law, it is clear from that examination that thepanel member did not understand Steele's responses. In sum, Steele testified that he did not file tax returns during the early 1980s because he was under criminal investigation, He had money with which to pay his taxes during those times, but based onhis interpretation of the law, concluded that he would not owe any taxes. When the investigation was concluded,he filed a tax return. However,by then,themoney with which topay the taxes owed had been lost due topoor investments. Steele never stated that his failure to pay the taxes was a violation of the law. Thewhole point of his testimonywas thathe did not believe the amount was due, and that the law did not require that he file tax returns because he was under criminal investigation by the Internal Revenue Service.Steele admitted that failure to pay taxes if a taxpayer acknowledged that they were due, and failure to file income tax returns if a taxpayer had no legal excuse for not doing so, would be violations of the law. But he vigorously denied that either circumstance pertained to him during the times that he failed to pay taxes or file returns. Therefore, the Committee's Finding No. 6 is taken out of context, distorts the essence of his testimony, and 

### is also clearly erroneous. In Finding No. 7,the Committee stated that because Steele no longer has themoney available with which to pay his taxes,he was financially and professionally irresponsible. Unsuccessful investments are not the equivalent of financial irresponsibility, and it is peculiar that members of this profession would find him professionally negligent as an accountant when he has never had a similar complaint filed against him, nor has he ever been disciplined as an accountant. The Committee's Finding 

### No, 8 states that Steele was neither candid in his application nor before the Committee. I find no indication in the record that Steele lacked candor during his testimonybefore theCommittee. Furthermore, since the Committee's finding lacks any specificity and provides no example of Steelels lack of candor, I conclude that it is insufficient as a basis for denying his application to take the bar exam or be admitted to a profession for which he has studied for over three years. The Committee's Finding No. 9 states that Steele failed to disclose his suit against the United States onhis application for

### certification. While that may be true, it is hardly a material basis for denying his application. Steele filed the suit and prevailed in the suit,and it had absolutely no adversebearing on his moral character or general fitness to practice law. Furthermore, allmaterials relating to the suit were fully provided to the Committee at their request prior to the time any decision

was rendered. This finding does not support the Committee's conclusion that Steelewas unfit to practice law. In its Finding No. 10, 

### the Committee stated that in spite of its requirement that Steele disclose information bearing on his character and fitness, he failed to identify two criminal investigations conducted by the IRS. However, neither criminal investigation resulted in any charge that Steele violated any law

or federal regulation. Neither did any investigation lead to any complaint that Steele violated any professional rules established for certified public accountants. How then did either criminal investigation have any bearing on Steelessfitness or character? Have we established a new presumption in our law that because

someone is investigated, that investigation provides evidence of unfitness or poor character? If so, then this opinion reflects a major change in the traditional principles of justice to which our courts have previously subscribed. In its Finding No. 11, 

### the Committee stated that Steele applied to take the February 1991 

### exam, even though he was not eligible. However, the record indicates that when Steele made application to take the February bar exam he thought he would be

### eligible. When he filed the application,he indicated thathewas still attending law school. All applicants for the bar exam anticipate their graduation date. Developments subsequent to Steelek application required that he take one additional course, which he did. This unforeseen series of events has no hearing on his fitness to practice law. Other than these findings, there is no factual basis in the Committee's decision for denying Steelelsapplication to practice law, Since I conclude that these findings are either unsupported by the evidence, or are inadequate bases for denying his application,I dissent from themajority opinionand would reverse theCommittee's denial of Steele'sapplicationtotake thebar exam and, if successful, subsequently practice law in the State of Montana. Steele has been a certified public accountant for 20 

### years. During that time, he represented many clients to their satisfaction. Because of his political and legal beliefs, he has been investigated by the IRS on two separate occasions, and has been involved in civil litigationwith the IRSon one occasion. In spite of those investigations, he has never been charged with a crime, nor even accused of a crime. He has never been found to have committed any ethical violation nor charged with any ethical violation. In the only civil litigation inwhich he was involved, he prevailed, and it was determined that the government owed him money.It is true 

### t:hat because of his poor investment history and misjudgment abouthis legal obligations,he now owes a substantial debt to the federal and state governments, However, that debt continues to be his obligation and will presumably be enforced by the government to its satisfaction. It does not disqualify him morally orrenderhimunfit to take thebar examination. Steele is being denied the opportunity to practice the profession for which he has prepared for over three years because of unconventional political ideasand incorrect legal conclusions drawn prior to his admission to law school. To forever deny him the opportunity to practice a profession forwhich he is otherwise qualified based on these past mistakes is a substantial injustice.

Justice Karla M. Gray joins in the foregoing dissent.December 22, 1993 CERTIFICATEOFSERVICE Ihereby certifythatthefollowingorderwas sentby UnitedStatesmail,prepaid,tothefollowing named:

RobertG. Steele P.O. Box7981 Missoula,MT 59807



### LarryM. Elison Attorney atLaw 1101W. GreenoughDrive Missoula,MT 59802

Annie M.Bartos,Chair Character&FitnessCommittee P.O. Box 1051 Helena, MT 59624 BarbaraBell Character&Fitness Committee 9ThirdSt.No. #201 Great Falls,MT 59401 BetsyBrandborg Character&FitnessCommittee 6582CanyonFerryRoad Helena.MT 59601 RobertJ.Sullivan Character&FitnessCommittee P.O. Box9199 Missoula,MT 59807 MichaelTolstedt Character&Fitness Committee P.O. Box849Billings,MT 59103 K.PaulStahl Character&FitnessCommittee 415Hayes Helena,MT 59601 EDSMITH CLERKOFTHESUPFFMECOURT STATEOF&fOM'AN!t