According to Steal This Movie!, Hoffman broke his five-year silence underground to single-handedly expose COINTEL, the FBI's secret campaign to disrupt the American left, with the aid of investigative reporter David Glenn (Alan Van Sprang). As the cinematic Hoffman prepares to leave the underground and take his chances with the law, he spies a newsmagazine with "COINTEL" splashed across the cover and says, "Glenn came through after all. COINTEL is going to die."
This scene, set in 1979 or thereabouts, is preposterous. David Glenn is a purely fictional creation, and Hoffman played no role in exposing COINTEL, which came to light in 1974 and was the subject of congressional hearings in 1975. Clearly, the FBI was still monitoring Hoffman and his friends while he was underground, though there is some debate as to how heavily. But by 1979, there was little to nothing to uncover about COINTEL. By adding a COINTEL "exposé" to Hoffman's résumé, the movie gives counterfeit political purpose to his underground years.
After surrendering to authorities in 1980, Hoffman spent a few months in prison and a little less than a year in work-release. He remained politically active until his suicide—protesting U.S. involvement in Central America, speaking on college campuses, and campaigning for the environment. The movie doesn't dwell on the '80s, but ends with Hoffman successfully defending himself in court after he and some Amherst students are arrested for protesting the CIA's actions in Nicaragua. (The suicide is mentioned in a postscript.)
Steal This Movie!'s most egregious distortion is one of omission: It largely fails to capture Hoffman's comic anarchism. In real life, he was always engaging in put-ons: He once made a speech saying he'd "fucked" Spiro Agnew's daughter (a claim the FBI actually bothered investigating), and during the 1968 convention he threatened to spike Chicago's drinking water with LSD. (Skeptical police were forced to guard the reservoirs.) While underground, Hoffman would send taunting letters to the FBI on stationery from various hotels. Hoffman also loved to tell the story of how, as a fugitive, he'd pretended to be a tourist and gone on a guided visit of the FBI headquarters. We'll probably never know whether or not that story is true.