I guess its true that pigs turn into hogs and hogs get slaughtered. In this case, its racist pigs turning into hogs, the sooner slaughtered (legally speaking) the better. Just for today let’s assume that VDARE is an educational organization with a valid 501(c)(3) purpose. It isn’t (educational, I mean), but this post is about private inurement and excess benefit, not why the organization’s hate speech precludes a finding that the organization has a charitable mission. That, tomorrow. If you can’t wait to know more about VDARE’s racism check out its online magazine. For now, here’s the organization’s nondescript mission statement. “The VDARE Foundation’s mission is education on two main issues: first, the unsustainability of current US immigration policy and second, the “National Question,” which is the viability of the US as a nation-state. We do this through the VDARE.com webzine and VDARE Books, public speaking, conferences, debates and media appearances.”
In January 2020, two of the three VDARE directors, 75 year old Peter Brimelow and his 38 year old wife Lydia Brimelow, used $1.4 million of the tax exempt’s state and federally subsidized, entirely donated wealth to purchase Berkeley Springs Castle, way off the beaten path upside a mountain overlooking Berkeley Springs, West Virginia, population 800. VDARE took in more than $4 million in donations in 2019 so it had means to make a cash purchase. James Brimelow, the lovely couple’s son, is the only other director and could not have stopped the purchase even if he were so inclined. No indication he was. Here is how the Washington Post describes the property:
The castle is an iconic part of the Berkeley Springs landscape. Built by Maryland businessman Samuel Taylor Suit in the late 19th century and listed on the National Register of Historic Places, it has stood above the mountain town since the 1890s. The sandstone edifice hosted ghost tours, wedding receptions and class trips. Tourists look up in fascination at a form of architecture more likely to be seen in Europe than nestled in the Appalachians.
VDARE purchased 55 acres and three houses on the castle grounds, along with the castle. The charity needed the Castle, it was reasonably asserted, because public venues shunned their meetings. They were never able to hold hater conventions in the local Hilton or Holiday Inn because private owners did not want to host hate. Nothing suggests VDARE overpaid for the property. Turns out, though, Lydia sent out July 4th greetings and Christmas card-like announcements proclaiming that donors had come through and the family had all moved in. No kidding, pictures of the family living life in the “hate castle,” as the locals call it, and everything. Like home. Peter, Lydia, their four girls and James picked up from Connecticut — VDARE is a NY nonprofit with headquarters previously in Connecticut — and headed to West Virginia like some kind of reverse Jed Clampett Klan.
On February 14, 2020, VDARE purchased a medieval-style castle in Berkley Springs, West Virginia. Shortly after the purchase, Lydia Brimelow confirmed that VDARE bought the castle with donor funds, writing that “donors stepped forward in an unprecedented way” to enable the purchase. She described the castle as a “meeting space,” and wrote that “[h]aving a space where we can meet and share ideas without fear of deplatforming will make a difference so material it is hard to overstate.”
But statements published on VDARE’s website within months of the purchase indicate that Peter and Lydia Brimelow were not using the castle as a meeting space but instead as their family’s full-time residence. The Brimelows posted family photos celebrating the Fourth of July and Christmas Eve in the castle. And, describing a visit to the castle, a VDARE contributor wrote that “Peter and Lydia Brimelow have moved in and spend most of their time there.” In a state-court filing, VDARE’s counsel admitted that Peter and Lydia Brimelow lived in the castle “for a period of months” and stated that they still live on the castle’s grounds.
Later in 2020, Lydia Brimelow executed two transfers on behalf of VDARE conveying the entire castle property—a $1.4 million charitable asset—to two West Virginia corporations she had founded earlier that year. One deed filed with the Morgan County, West Virginia, Register of Deeds conveyed the castle itself and the land it occupies to the Berkeley Castle Foundation, Inc., a not-for-profit established by Lydia Brimelow. A second deed conveyed the remaining eight parcels of surrounding land to BBB, LLC, a for-profit corporation also established by Lydia Brimelow. The sole signatory for both deeds was Lydia Brimelow. Under the tagline “When nothing but a castle will do,” the Berkeley Castle Foundation now advertises the castle as a for-rent event space. According to a publicly filed contract signed by Lydia Brimelow (as both landlord and tenant), the Brimelows now pay monthly “rent” to BBB, the for-profit corporation, to reside on the castle property. In other words, the Brimelows used charitable funds to purchase property in which they reside, transferred the grounds to a for-profit corporation they control, and now pay rent to that company, in essence to themselves.
There is enough here to support a no-knock warrant, never mind an investigative subpoena. And if the Service isn’t already aware of this then we really have a problem, don’t we? Remember, right now VDARE is only complaining about what seems an easily justifiable subpoena. VDARE is gonna lose that case.
VDARE’s biggest problem, though, is with New York law regarding nonprofit governance and alienation of nonprofit assets. Not with even federal tax law. I have neither evidence nor doubt that the Brimelows set out to use charitable assets to buy their dream home, reminiscent of a castle Peter Brimelow, as street urchin probably, coveted as a child in England. And to occupy that castle as their private home. It definitely looks that way. But here is the thing about private inurement and excess benefit. Intermediate sanctions were enacted to take the nuclear option — complete revocation — off the table. Private inurement and excess benefit sanctions are not revenue raisers, they are intended to prohibit behavior, and if that doesn’t work, to offer absolution if violations are corrected and forever renounced. VDARE and its directors are well on their way to correction, if only kicking and screaming, and it will have up to 90 days after receipt of a notice of deficiency for the initial 4958 excise tax, to complete the correction. They have already moved out of the castle and have rented one of the other houses out back, though they are paying rent to an LLC owned by Lydia to which the houses were transferred for no consideration. That’s right, Lydia and the family are using a house owned by the charity as an Airbnb, but they are the only people flying in and living in the place. That’s gonna need undoing. But it won’t be difficult though. All Lydia needs to do is transfer the house to the Berkeley Castle Foundation — and for Chriissakes, don’t claim a charitable contribution when you do! — and keep paying market rent. That’s it, though it would certainly help to bring in some ostensibly independent directors to compliment the Brimelows who are the whole board right now. But I am not talking about best practices right now, just avoidance of an excise tax.
VDARE’s clumsy private inurement is mere foot fault and won’t support revocation, at least not if they fix all of it. The only real basis to revoke VDARE’s tax exempt status is its hate speech. That’s right, precisely that. Don’t listen to the chicken littles who say we can’t revoke tax exemption for hate groups. I discuss why that result is appropriate, required, and very much constitutional tomorrow.
darryll jones
