Fallout in the Family

Page 6 of 10

Charlie resigned shortly before his term ended. Utah's income taxes bothered him, so he and M.L. decided to move to Nevada. In 1961 they bought three Washoe Valley ranches outside of Reno, where they would build a mansion and run cattle and breed Arabian horses.

Charlie told a writer for Cosmopolitan: "What I liked best about Nevada was the protective coloration. In Moab, I was the only millionaire. In the Reno area, there were at least 130 others, some a lot richer than me."

They got to know the casino owners and continued to hang with celebrities. The Steens sold Wayne Newton his first Arabian, and the singer later brought a prospective bride to their house for their approval. M.L. was head of the Crippled Children's Association in Reno and got to meet such entertainers as Dinah Shore.

Charlie still had plenty of money, and he made more when he decided to sell the Mi Vida mine and the mill. Meanwhile, he had diversified his investments. He didn't want the security of tax-exempt bonds; that would have led to what he once called "the Three B Syndrome of bridge, bourbon and boredom." (That quote and some other Steen anecdotes come from the 1989 book Uranium Frenzy, by Raye C. Ringholz, and Maxine Newell's pamphlet Charlie Steen's Mi Vida.) Instead, he headed mining companies that were exploring for gold and silver in several states, as well as in British Honduras and Mexico. Along the way, he'd also invested in a dizzying number of ventures, including a pickle factory, a marble quarry, a copper mine and an aircraft factory. But the mining properties were his love: He just knew he had another big strike in him.

Although each of the boys was set up with a $500,000 trust fund, Charlie didn't exactly plan for his and M.L.'s own future. Except for the Washoe Valley mansion. They built a 27,000-square-foot marble house, with a 13,000-square-foot living room, a dining room surrounded by a moat and an indoor pool. They filled the house with plunder from their worldwide trips. In 1966, after three years of construction, they moved into the mansion.

Two years later, the lights went out.

One day in February 1968, agents of the Internal Revenue Service showed up at Charlie Steen's Reno headquarters and seized the building and its contents with no warning. It was a "jeopardy assessment": The IRS, concerned over a recent court case against Steen, didn't think Charlie would be able to pay his taxes.

Stretched thin by a string of dubious investments, Charlie was stuck. He didn't have big cash reserves, and he sure as hell couldn't drill new mines to generate cash flow with his offices padlocked and his papers seized.

That May, Charlie filed for Chapter 11 protection in federal bankruptcy court. It would take eleven arduous years for the Steens to settle with the federal government.

"It was culture shock," recalls the Steens' longtime friend. "There was a lot of bitterness. You lose a lot of freedom and independence. You're immediately impoverished, living in a big house with no electricity and no groceries. It was an immediate about-face. You don't take that without bitterness. But you come to the point when you accept it to survive, to keep from being sick every day."

The friend recalls asking M.L. whether they'd salted away money in a Swiss bank account. M.L. replied, "This is America. We didn't think we had to."

M.L. was "pretty well devastated," the friend says. "Charlie was devastated, too, but he was able to muster the need to fight back."

Charlie Steen, who'd enabled the government to buy uranium much more cheaply than it could have imported it, already had paid the government $30 million in taxes.

"He had saved the American taxpayer in excess of $2 billion and made us a world power," M.L. said.

None of that mattered.
Charlie's lawyers sorted through the complex case and offered a settlement of about $480,000. The government wanted $4 million. Charlie wanted to fight. While negotiations dragged on, the government allowed the Steens to live in their mansion, but they were denied the funds to run it. At one point, they were eating beans by candlelight after the power had been shut off.

Charlie simply had to make one of his mining ventures work, and so he went back out into the field.

Working at a drilling site in California in 1971, he suffered another major hit. The drill smacked Charlie in the head. He was rushed to a hospital, where he had life-saving brain surgery and then lay in a coma for 33 days.

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Ward Harkavy
Contact: Ward Harkavy