Montana Gov. Brian Schweitzer will now decide if Smith — who is seeking life in prison without the possibility of parole — lives or dies.
"Right now I'm hurting so bad. I'm not ready to lose my dad," cried Smith's daughter, Carmen Blackburn, in an emotional interview with The Canadian Press.
"I'm still praying that the governor will see how much he's changed. My dad is not the person he was 30 years ago and I wish that the parole board would have seen that," she added.
Smith's sister, Rita Duncan, who testified on her brother's behalf, was also shocked by the outcome.
"Absolutely dumbfounded right now. I can't believe they made that decision," Duncan said.
"Everything a person could humanly do to transform themselves to be a better person, and to apologize — I don't know what more a person could do. If Ron can't get clemency, I don't know who can," she added.
Smith's family members hope to meet with Schweitzer in person to make their plea as soon as possible.
Smith's lawyers were not shocked but they were disappointed.
"Even though they made a big to-do about it, this report just shows the way the state of Montana has been all along," Smith's longtime lawyer Don Vernay told The Canadian Press.
"It's always been they're going to kill this guy, because for them to do an investigation in the manner they did shows they don't care."
A report done by staff at the Montana Board of Pardons and Parole, obtained prior to the clemency hearing, strongly recommended against granting Smith mercy. The board's final decision followed suit.
"It is the unanimous decision of the board to recommend that the Governor of the State of Montana should not grant Ronald Allen Smith the extraordinary remedy of clemency," the panel wrote.
The decision by the three-member board was unanimous.
"The testimony presented by witnesses both supporting and opposing clemency for Mr. Smith was compelling and heartfelt," said the panel members in a letter to Gov. Schweitzer.
"The level and intensity of emotional testimony from both members of Mr. Smith's family and the extended family and friends of his victims, Mr. Madman Jr. and Mr. Running Rabbit Jr. was unprecedented in the experience of the board," the letter said.
"Whatever final decision that is made by you in this matter will result in continued grief and anguish for some, albeit solely as a result of Mr. Smith's actions."
Smith, 54, has been on death row ever since he admitted to shooting Thomas Mad Man Jr. and Harvey Running Rabbit near East Glacier, Mont., in 1982. He originally asked for the death penalty, but soon after changed his mind and has been fighting for his life ever since.
Originally from Red Deer, Alta., Smith was 24 and had been taking LSD and drinking when he and Rodney Munro marched the two men into the woods where Munro stabbed one of them and Smith shot them both in the head.
Munro accepted a plea deal, was eventually transferred to a Canadian prison and has completed his sentence.
The board's recommendation against clemency is not binding. It is now up to Gov. Schweitzer to decide if Smith lives or dies.
Smith was informed of the decision Monday afternoon and told his daughter shortly afterward.
"He's not worried about himself. He's worried about all of his family," Blackburn said.
Vernay said he hopes the governor "is more open-minded" than the rest of the state of Montana.
"All we can do is hope, obviously. It is mind-boggling to me that they did not recommend clemency given what we put on at that hearing."
Schweitzer talked about death penalty cases in an interview with The Canadian Press last year.
"You're not talking to a governor who is jubilant about these things,'' he said at the time from his office in Helena. "It feels like you're carrying more than the weight of an Angus bull on your shoulders."
Smith told the clemency hearing that he was "horrendously sorry" for his actions.
"I do understand the pain and suffering I've put you through,'' he said to the families of the victims. "It was never my intent to cause any suffering for anybody. I wish there was some way I could take it back. I can't."
"All I can do is hope to move forward with my life and become a better person."
But one by one members of the Mad Man and Running Rabbit families demanded that Smith be executed for his crimes.
Thomas Running Rabbit, son of one of the victims, said he would seek justice for the father he never knew until "Ronald Smith's last breath.''
"The decisions he made he has to pay for,'' Running Rabbit told the hearing. "He had no mercy for my father."
A cousin, Camille Wells, called Smith "an animal.''
"He is the scum of the earth and I will hate him until the day I die.''
Vernay said the board obviously didn't want to rock the boat.
"It's the easy route. It's just going with the flow and it flies in the face of all the prison officials that testified and wrote letters for him," he said.
"It's just ridiculous when prison guards come up and say they sought this guy out to say goodbye when they retired. These people like him. I've never seen anything like it. If there is a case for clemency it is this one.
"The guy really has changed. You can't fake it for 30 years."
Even if Schweitzer denies clemency, there is one more factor in the case.
The American Civil Liberties Union filed a civil lawsuit on Smith's behalf in 2008 that argues Montana's executions amount to cruel and unusual punishment.
The next court date in the lawsuit is scheduled for September.
An official with the group, Ron Waterman, told The Canadian Press earlier this year that the lawsuit and the clemency hearing were "parallel proceedings'' and the application for clemency was not a factor in the civil suit.
Waterman said the lawsuit has stalled while Montana attempts to upgrade the trailer where state executions take place.