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, 1993 
Justice Fred J. Weber delivered the Cpinion of the Court. 

Petitioner Robert G. Steele appeals from the final decision of 

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 to practice 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 review of 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 liens and 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 the University 

of Montana School of Law until the spring of 1991. Steele was 

asked to submit a written explanation of why he had applied to take 

the February examination when he would not have fulfilled the 

graduation requirement until June. Steele responded by telephone 
that he had applied for a faculty waiver for a required one-credit 

course which he had attempted to replace with an "independent 

study" project. He stated that he would not know until February 4, 

1991, whether the faculty would grant his request for a waiver. 

After the faculty denied his request for waiver, Steele requested 

that the State Bar allow him to take the examination without 

meeting the graduation requirement and he was advised that this was 

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 position did not change following the 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 

income tax returns for tax years 1982 through 1986. With penalties 

and interest added, Steele's personal tax liability to the IRS was 

greater than $208,000 at the time of the informal hearing. 

Steele provided an authorization for disclosure and waiver for 

the Committee's use in obtaining relevant information fromthe IRS. 

He also submitted numerous documents to the Committee demonstrating 

his tax protest activities in the early 1980s. Most of these 

documents consisted of correspondence to and from members of the 
Montana 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 for his 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 in more 

detail: 

I have an offer and compromise that I mailed 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 gripe with me. As a matter of 

fact, they offered to -- They wanted me to go to work for 

them, and I have agreed to do work for them. They told 

me they will pay me for both my time and my 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, including questions concerning his 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 people would come to you as an 

accountant and ask your advice, what type of advice were 

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 file a return with the information that was 

on there. The answer to your question is, no, I didn't 

get into a professional advisory capacity, unless it was 

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 from different 

senators that were encouraging our position at that 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 numerous tax court appearances, he 

was convinced that his tax protest 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 

"other matters" for tax years 1982 through 1990 and his permission 

to discuss an "Agreement to Assist 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 employees who 
had dealt with Steele and copies of such were attached to the 

letter. The Committee also was informed that Steele had never been 

employed by the IRS, but that he had agreed to work 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 for tax years 1982 through 1986 and 

only filed them after entering law school: (3) that his tax 

liability was in excess of $200,000 and that he had made no effort 

to pay any of the taxes when 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 

conferences with the Appeal's Division without a meaningful audit 

and delays resolution of cases pending before the Tax Court until 

the eve of trial, a tactic which he apparently believes will 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-conspirator 
because of his affiliation with the Golden 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 Steele had 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 

Committee provided formal notice to Steele by certified mail 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 

7 
by your failure to disclose the IRS's criminal 

investigations of 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 responsibilities as evidenced by 

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 compromise had not been accepted by the IRS. Steele also had a 

chemical dependency evaluation performed on September 19, 1991 and 

had the evaluation results forwarded to the Committee. 

After the hearing, Steele was allowed to depose two additional 

IRS employees, submit additional interrogatories to one of the 

witnesses at the hearing and to submit other additional materials. 

On July 22, 1992, the Committee met to review Steele's application 

and again denied his application. Formal findings and 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 

8 
opinion. 

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: 

Every Applicant for the Montana 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 to the Clerk 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 the entire record to determine if the Committee erred. 

When the facts are admitted and uncontested, as they are 

in this case, we will give due consideration to the 

inferences drawn by the Committee, including inferences 

concerning rehabilitation and mitigation. Consideration 

will be given to the recommendation of the Committee as 

to whether the applicant is of the requisite good moral 

character and fitness to be admitted to the Montana Bar. 
The Committee will have heard testimonial evidence and 

will have had the opportunity to observe the demeanor and 

judge the credibility of the applicant or other 

witnesses. However, inasmuch as we are designated by the 

Montana Constitution to ultimately make this decision, 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 regulate bar admissions in Montana, such authority is 

subject to the limits imposed by the United States Constitution. 

The United States Supreme Court has held that, in making 

determinations of an applicant's character and fitness to practice 

law, the applicant must be afforded adequate due process of law. 

Willner v. Committee on Character and 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 the basis of character, the applicant, at some 

stage of the proceedings prior to such denial, must be 

adequately informed of the nature of the evidence against 

him and be accorded an adequate opportunity to rebut this 

evidence. 

Steele contends that he was not afforded due process because 

he either did not receive notice of the Committee's bases 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 constitutionally 
protected activities which Steele had engaged in prior to attending 

law school. 

In support of his claim that he did not receive due process, 

Steele contends that the Committee did not identify the evidence 

against him; specifically, the Committee did 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 for assistance in its inquiries. 

The Committee may, in its further discretion, determine 

whether evidence to be taken in tesuimonial form shall be 

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 shall be kept, and a transcript may be ordered by 

the Applicant at the Applicant's own expense. 

Rules of Procedure of the Committee on Character and Fitness, Rule 

5(i) (March 25, 1993). 

Steelets objection here seems to center around the evidence 

supplied by IRS employees as previously set forth in this opinion; 

he states that their "inability to specify either because of 

confidentiality or lack of memory leaves . . . Steele in an 

informational and evidentiary wasteland." 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 the 
independent 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 

Steele made false statements in his application. False statements 

include omissions. Thus, Steele's argument that the Committee 

failed to identify any actual false statements is not relevant. We 

focus on the omissions in Steele's application. 

The application form asks the applicant to list any civil 

proceedings in which the applicant has 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 the Ninth Circuit Court of Appeals. More importantly, 

Steele did not inform the Committee about two criminal 

investigations that the IRS had initiated against him in the 1980s. 

Moreover, despite providing the Committee with a two-inch sheaf of 

paper after the Committee inquired into his dealings with the IRS, 

Steele continued to withhold information about the criminal 

investigations. The Committee found out about the criminal 

investigations from the information disclosed by the IRS after the 

informal hearing. 

Steele contends that because the application for admission did 

not specifically request him to list any known criminal 

investigation, it cannot be an omission to fail to include that 
which is not specifically requested. However, the application does 

require an applicant to disclose any other information not already 

given havina a bearina on character and 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 the years 1982-1986 in 1987. My 

original returns for those years were protest returns. 

This was because, in my practice as 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 

IRS with financial statements and Mr. Huggins seems to be 

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 Market 
about 1983. While this has diminished by ability to pay, 

it has not helped the tax problems because Capital losses 

are only allowed to offset ordinary income to the extent 

of $3,000.00 per 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 

would be currently dischargeable in bankruptcy. I do NOT 

intend to resort to bankruptcy since the debt is a 

legitimate result of a mistake I made. 

The mistake, however, was instrumental in my decision to 

enter Law School. I believe that I am now equipped with 

an understanding of law and taxes to allow me to assist 

clients in this area where few attorney's [sic] wish to 

specialize. The IRS is no longer an enemy but rather an 

agency in need of guidance from a Congress enlightened by 

attorney's [sic] with knowledge and experience in this 

realm. A system of taxation that meets the needs of our 

government and yet inflicts the least intrusion into the 

lives of those who pay it should be the goal 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 

any mention 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. 

Applicant made 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 

this would require permission fromthis Court. 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 conclude that Steele was 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 

Committee had concerns about his tax liens and DUIs. After further 

communication with Ms. Weber and the Committee, Steele knew the 

Committee was concerned about his ineligibility to take the 

February examination, he knewthe Committee was concerned about his 

problems with the IRS and he knew the Committee was 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 Steele was 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 was 
significant. 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 facts relating to his 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 Steele had made Valse statements 

including omissions," the Committee made a number of additional 

conclusions with regard to the filing of 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 

$20,824 and had made an offer of compromise of $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 otherwise 
and that he acknowledged this was a violation of the law. The key 

conclusion in paragraph seven was that the behavior 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, slightly more than one 

percent of the amount owed. Applicant presently owes the 

State of Montana Revenue Department more 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. The Applicant 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 failure to file income tax returns were violations of 

IRS regulations. 

7. Money available for payment of taxes was spent 

by the Applicant. Such behavior shows lack of 

reasonableness, neglect of financial responsibilities and 

neglect of professional obligations as an accountant. 

Applicant was more than 35 years of age and had been 

employed for more than 15 years 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, and has made false statements including 

omissions. Based on Applicant's omissions in the 

application process and on the evidence adduced in the 

hearings process, the Committee finds that the Applicant 

lacks sufficient moral 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, and with unquestionable integrity. 
Steele contends that the Committee based these findings in 

part on constitutionally protected 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 any part of the decision on 

his right of freedom of assembly for his presence in a group of 

persons assembled to protest the foreclosure of a family store. We 

find no evidence that the Committee considered any of these 

activities in making its decision except to the extent that Steele 

omitted information on his application or to the extent that he was 

not candid in discussing them. 

From our review of the record, we affirm the conclusions with 

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 straightforward answers to questions asked by the Committee. 

Following is a portion of his testimony: 

MR. SULLIVAN: Let me ask you: Did you actually sit 

down and keep figures for your income, for deductions, 

and compute what a tax would have been in 1982? 

MR. STEELE: No, I did not do that. 

MR. SULLIVAN: Why is that? 

MR. STEELE: I believed that would never be 

18 
necessary. I believed it was all going to change. I 

believed that the IRS was going to see the error of their 

ways and we were going to have a new tax system. 

MR. SULLIVAN: And you believed that the government 

was not going to seek to collect what they felt was 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 some money and 

I was investing at that time, At that time, I always had 

an open mind. If they could show me where we were wrong 

and convince me that we were wrong, I was willing to file 

the return; and I had the money at that time to pay it. 

MR. SULLIVAN: Maybe my question isn't very clear. 

I get the impression that back then you felt that it was 

an invasion of privacy to provide all of this information 

about your earnings and your deductions, but I am a 

little unclear. Are you saying it was a violation of the 

constitution to tax you? 

MR. STEELE: Of course not. 

MR. SULLIVAJ: So did you s-et. aside any. money..tg p.ay 

tax. or is-jtyou_r..po-s-ition .that you..owed no. 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 sales tax, something like that, that wouldn'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 Steele admitted that the failure to 

file tax returns was a violation of IRS regulations. 

The emphasis in the above quote illustrates the difficulty of 

19 
obtaining a direct answer from Steele. In addition, from the above 

testimony it appears that Steele did not intend to pay 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 income and deductions for tax purposes, 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 record does not disclose any willingness on the part 

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 standards 
set 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, I conclude that those findings of fact relied on 

by the Committee to support its denial of Mr. Steele's application 

either lacked sufficient specificity so that they can be 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 the panel 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 on his 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, the money with 

which to pay the taxes owed had been lost due to poor investments. 

Steele never stated that his failure to pay the taxes was a 

violation of the law. The whole point of his testimony was that he 

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 the money 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 

testimony before the Committee. 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 on his 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 adverse bearing on 

his moral character or general fitness to practice law. 

Furthermore, all materials 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 Steele was 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 Steeless fitness 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 that he was 

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 Steelels application 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 the majority opinion and would reverse 

the Committee's denial of Steele's application to take the bar 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 litigation with the IRS on 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 in which 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 about his 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 or render him unfit to take the bar examination. Steele is 

being denied the opportunity to practice the profession for which 

he has prepared for over three years because of unconventional 

political ideas and incorrect legal conclusions drawn prior to his 

admission to law school. To forever deny him the opportunity to 

practice a profession for which 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 

CERTIFICATE OF SERVICE 

I hereby certify that the following order was sent by United States mail, prepaid, to the following 

named: 

Robert G. Steele 

P.O. Box 7981 

Missoula, MT 59807 

Larry M. Elison 

Attorney at Law 

1101 W. Greenough Drive 

Missoula, MT 59802 

Annie M. Bartos, Chair 

Character & Fitness Committee 

P.O. Box 1051 

Helena, MT 59624 

Barbara Bell 

Character & Fitness Committee 

9 Third St. No. #201 

Great Falls, MT 59401 

Betsy Brandborg 

Character & Fitness Committee 

6582 Canyon Ferry Road 

Helena. MT 59601 

Robert J. Sullivan 

Character & Fitness Committee 

P.O. Box 9199 

Missoula, MT 59807 

Michael Tolstedt 

Character & Fitness Committee 

P.O. Box 849 
Billings, MT 59103 

K. Paul Stahl 

Character & Fitness Committee 

415 Hayes 

Helena, MT 59601 

ED SMITH 

CLERK OF THE SUPFFME COURT 

STATE OF&fOM'AN!t