Experts: VDARE’s Real Estate Deals May Cost Group Nonprofit Status
White nationalist hate group VDARE could lose its nonprofit status over real estate agreements surrounding a historic castle the group purchased in Berkeley Springs, West Virginia, according to two nonprofit lawyers to whom Hatewatch described property records and court filings. Most of the documents came from a lawsuit VDARE brought against New York Attorney General (AG) Letitia James’ office, wherein the AG alleges VDARE “violated New York law.”
The VDARE Foundation, a nonprofit based in New York that leading white nationalist activist Peter Brimelow founded in 2008, purchased the castle for $1.4 million in February 2020. The foundation serves as an umbrella organization for VDARE’s website, which it claims is a nonprofit journalistic outlet but consists of anti-immigrant and white nationalist posts. The hate group used donations for the purchase, according to court documents.
Public tax filings known as 990s show VDARE’s donations soared from $500,672 in 2018 to $4,258,309 in 2019. DonorsTrust, a nonprofit used as a “dark money ATM” for certain charities, donated $1.5 million to VDARE in 2019, DonorsTrust’s 990 shows. According to documents in the lawsuit docket, VDARE deeded the entirety of the castle property to two entities: a nonprofit called the Berkeley Castle Foundation and a for-profit limited liability company (LLC) called BBB. BBB paid VDARE $310,000 for its section of the property, according to the deed.
BCF paid VDARE $10 for the land it received in the deed. In that deed, the hate group cited West Virginia law which it claimed means “the transfer is exempt from the excise tax as a transfer between like nonprofit corporations having the same or similar purposes.” Another real estate deal called a deed of trust; security agreement and fixture filing, shows VDARE lent BCF $1,081,660.77 for the purchase of the castle property. Hatewatch obtained the document from the Morgan County, West Virginia, property search site.
Peter’s wife, Lydia Brimelow, who is also a VDARE officer, is the head of both organizations with which VDARE conducted these real estate transactions. The transfers happened in December 2020.
These transactions – and the composition of VDARE’s board when they occurred – could run afoul of both federal and New York nonprofit law, the lawyers said.
Hatewatch contacted Peter and Lydia Brimelow for comment. Peter Brimelow sent Hatewatch a VDARE article the site published on May 22, which disputed many aspects of the AG’s case. Among them, the article claims that VDARE owns BBB and BCF is a “supporting organization,” which nonprofit law defines as “a charity that carries out its exempt purposes by supporting other exempt organizations.”
In 2020, James said her office would take tougher legal action on organizations that engage in real-life discriminatory actions and online hate speech against protected classes.
VDARE’s social media accounts and website publish racist, anti-immigrant posts daily. Brimelow and his wife Lydia are close to the hard right of the Republican party and have found mainstream acceptance at private Republican events.
In June 2022, after VDARE’s “own public filings, statements and published media reports revealed a possible pattern of self-dealing, misleading donor solicitation, misuse of charitable assets, and false reporting,” James’ special counsel for hate crimes subpoenaed Facebook’s records related to VDARE. The AG’s office later subpoenaed donors, employees, possible conflicts of interest, financial interactions between VDARE and the BCF and BBB, the purchase of the castle and numerous other issues. VDARE brought the suit rather than comply with the AG’s subpoena, which the hate group claimed violated itsFirst Amendment rights.
Jeff Tenenbaum, a managing partner at the Washington, D.C.-based Tenenbaum Law Group, which specializes in federal nonprofit law, told Hatewatch he did not have enough information on the real estate deals and VDARE’s composition to make a judgement. He said, however, they “could be very improper. … Anytime there is personal benefit to the founders/directors/managers of a nonprofit deriving from the nonprofit, it gives rise to potential private inurement and impermissible private benefit.”
Tenenbaum said such potential benefits “can pose a risk to the organization’s 501(c)(3) tax-exempt status.”
New York ‘alarm bells’
James’ office alleged in a filing that each of these real estate transactions surrounding the deeds were subject to approval by either her office or the New York Supreme Court under New York law. They also “would require … approval by disinterested members of the VDARE Board of Directors.”
VDARE’s 2020 990 shows the VDARE board consisted of Lydia, Peter and his brother John Brimelow. James’ office further alleged that because VDARE’s entire board was a single family at the time of the real estate deals, “no approval by disinterested directors could possibly have been granted.”
Gary Schuster, a partner at J&G Law LLP who helps New York nonprofits navigate state law, confirmed that when a nonprofit designated as a charity under New York law sells or deeds away “all or substantially all” of its assets, those deals are subject to approval by the AG’s office or the New York Supreme Court.
Regarding the AG’s claims about disinterested board members agreeing to the transactions, Schuster told Hatewatch there are ways a board can have three related individuals and still function in accordance with the law. “If there are three family members on the board, but there’s 14 other people on the board, then the family members might not control what happened.”
But “when there’s only three and they’re all related, then the alarm bells go off,” Schuster said.
Brimelow wrote in the article, “There is absolutely no reason the VDARE Foundation board should not have been made up of Brimelow family members: this is common for small, family-run foundations.”
He further claimed that VDARE’s board “has always had at least one, and at various times at many as three, non-family members, as is perfectly obvious from our filings.”
Hatewatch was unable to determine non-family board members from VDARE’s 2020 990.
Court records further contain a lease between BBB and Lydia Brimelow for two addresses on the property. The lease states the head of BBB will pay BBB $1,800 a month for rent of the two addresses or “Premises.”
The lease began on April 1, 2021, and was set to end on April 30, 2023. It is unclear to what exact premises on the castle grounds the lease refers. James’ office alleged in another lawsuit it brought against VDARE in New York state that the Brimelows have made public social media posts that suggest they have used the castle as their private residence since 2020. After the purchase, Brimelow told West Virginia newspaper The Journal that apart “from local charity events, weddings, etc., we’ll probably just have dinners for people. We aim to be quiet, good neighbors.” The Brimelows hold events at the castle, residents have told Hatewatch.
Fair comparison
Schuster explained that when New York charity nonprofits sell or lease assets, the law requires them to do so for market value. VDARE should have run comparisons for both the deeds and the lease from BBB to Lydia Brimelow to make sure the transactions were fair-market value, he said.
Schuster gave the example of an apartment in New York City, which is surrounded by similarly made properties. A nonprofit board could check the recent sale or rental prices of these apartments to find a fair-market value of their asset.
“Now a castle is a little different,” Schuster said, “but there’s always a way to find out.” Schuster said regulating authorities like James’ office would want to know “did they even try to find out?”
Brimelow wrote that “at every step … carefully monitored by our lawyers, we paid independently determined fair market rent.”
Schuster also explained that when a New York charity engages in transactions with “related parties,” those can also face scrutiny. New York law defines related parties as s the nonprofit’s directors, officers, key persons, and their relatives and entities.
He gave the example of a charity buying pizzas for an event that came from a pizza parlor owned by a member of charity’s board.
In such a case, a charity must “consider alternatives. And you have to put all of that in the minutes of meeting and the board has to find that the transaction is as fair and reasonable to the corporation, so they may run afoul of that section of the law.”
Meeting minutes are very likely among the documents the AG subpoenaed from VDARE. James’ office did not respond to a request for comment.
The fact that VDARE conveyed the property to both an LLC and nonprofit is another “wrinkle,” Schuster, who has practiced law in New York since 1989, said.
“It's a complication that raises a lot of questions. What’s the relationship between the LLC and the charity? How does that work?”
Both the court case and ProPublica’s Nonprofit Explorer database host copies of VDARE’s 990 form for 2020, the latest available year. Neither copy appears to list the $1,081,660.77 loan to BCF in the section that allows nonprofits to list loans involving interested persons.
The VDARE article that Brimelow sent to Hatewatch includes a screenshot of VDARE’s 2020 990 that does show the loan. Hatewatch asked Brimelow to explain the discrepancy.
Brimelow did not respond to further requests for comment.
Photo illustration by SPLC
