'Deeply bronzed' ... American fascist Lawrence Dennis. Photograph: Charles E Steinheimer/ Getty

It turns out that the man Life magazine once described as "America's number one intellectual fascist" was, in fact, a light-skinned African American, born in the segregated South - although he "passed" for white among the greatest race hatemongers known to mankind.

In a new book, The Colour of Fascism, Gerald Horne reveals how Dennis managed to live a lie for his entire adult life. "It's not clear that his wife knew that he was black," says Horne, a history professor at the University of Houston. "He certainly never told his daughter. When she asked him, he would just smile enigmatically."

Dennis was born in Atlanta, Georgia in 1893 just as racial segregation had fully reasserted its authority on the South in the wake of the civil war. His mother was African American, as is clear from pictures; his father's race is not known. As a boy he was a famous child preacher, spreading the gospel first among black American congregations and then later abroad, even in Britain. But at some point in his adolescence, he did something quite dramatic: he cut all ties with his family so that he could attend the prestigious school of Exeter, and then Harvard, as a white man. After that he briefly pursued a career as a diplomat and broker, and then in the wake of the Wall Street Crash went on to become the public face of American fascism. None of these jobs would have been open to him had it been known he was black.

"Passing" was common in American society at the time. Despite laws against miscegenation, the pervasive practice of masters raping their slaves had produced a large number of light-skinned people. Under America's rigidly enforced codes of racial supremacy, any child of a mixed-race relationship was deemed "black", regardless of their complexion. They called it the one-drop rule: one drop of "black blood" made you black.

Given the manifest benefits of life on the other side of the colour line, black people who could pass as white often did, even though doing so meant cutting themselves off from their family and their past. Passing has provided the dramatic tension for many a novel, including Philip Roth's The Human Stain, Walter Moseley's Devil in a Blue Dress and, most pertinently, Nella Larsen's Passing. "Every year approximately 12,000 white-skinned Negroes disappear," Walter White, the former head of the civil rights organisation, the National Association for the Advancement of Colored People, claimed in the late 1940s. "People whose absence cannot be explained by death or emigration ... men and women who have decided that they will be happier and more successful if they flee from the proscription and humiliation which the American colour line imposes on them." White, who was light-skinned, used to pass himself as white at times when investigating lynch mobs in the South.

Interestingly, Dennis was dark enough to make most people look twice. The Nazi sympathiser and pilot Charles Lindbergh suspected that some of Dennis's "ancestors ... might have come from the near east". Lindbergh's wife Anne referred to Dennis's "bronzed" skin. A New York Times report in 1927 outlined Dennis's "close-cropped bristly hair and [skin] deeply bronzed by the tropical sun". A leftwing newspaper mentioned "the tall, swarthy prophet of 'intellectual fascism' ".

"Some suspected and others knew," says Horne. "But there was a don't-ask-don't-tell policy in place at the time for those on the borders of the colour line. One could perform whiteness to some degree, and that is precisely what Dennis did. His conservative politics also insulated him from a lot of further inquiry."

Years later, when he was forced to defend himself against charges of being a Nazi collaborator in a high-profile trial, one onlooker is recorded as saying that she was "puzzled and apprehensive over the fact that in nothing which I have read about Lawrence Dennis has mention been made that he is the son of a Negro mother. This fact was known to thousands, at least up to his 16th year when I knew him."

But while most people were, it seems, certain that he was no Wasp, no one seems to have had the audacity to suggest publicly that he was black either. And among the black community there was such a widespread awareness of passing that "outing" someone was considered a particularly vengeful act. "Black people then would have been very protective of his secret in a way I think they would not be now," says Horne. "He was like a slave who had escaped the plantation."

In any case, Dennis was not your run-of-the-mill fascist. He described fascism not so much as an ideology he favoured but simply as the inevitable consequence of America's political trajectory. "I took what was then considered a pro-facist view," Dennis explained in his later years. "I said that Hitler and Mussolini were rising to meet the economic crisis and that we would have to do much the same thing ... I defended them and tried to explain them; and that [brought] me under considerable criticism and attack as being a fascist ... I said the United States will have to go fascist in the same way that Germany and Italy have gone."

Dennis had in fact gone further, while still hiding behind the smokescreen of objectivity. "When analysed simply on the basis of historical fact, [Hitler] is not only the greatest political genius since Napoleon but also the most rational," he once said.

Dennis's views gained particular currency in the late 1930s as a significant portion of the US rallied against America joining the war and he launched into his most prominent period as a forthright isolationist.

Horne describes Dennis's position as both cynical and logical. "Well, you could see why he would think it was inevitable," he says. "Fascism was a far greater threat to the US than communism ever was. Dennis had no faith in the white working class. So if you believe it's going to happen you have one of two choices. You can fight against it or you can ride the wave. He decided to ride the wave and that was hard-boiled cynicism and coldly calculating."

Dennis was a prickly, arrogant character who never seemed to be happier than when he was slating the intellects of others and making references to his own superiority. In an interview with the author John Roy Carlson, he was asked about a series of congressmen with whom he was acquainted. For each one he would just say: "Dumb. No brains." The influential publisher of the Chicago Tribune company? "Dumb. No brains." On a trip to Germany he met Rudolph Hess, whom he regarded as "more of an intellectual than the others", meaning Hermann Goering and Joseph Goebbels.

Dennis was undoubtedly antisemitic - "I am no friend of the Jews," he once wrote - but his antisemitism was no more pronounced than that of most Wasps in the US at the time and less severe than that of the Nazis. "Hitler says the Jew cannot be a citizen of Germany. I consider that position to be unsound nationalism," he said. "As for any persecution or organized violence against Jews in this country, I consider it unthinkable."

Not surprisingly, perhaps, his racial politics were the most peculiar. He kept company with some of the most extreme white supremacists of his day, but despite the views of most of his friends and backers, Dennis managed both to champion fascism and subtly to maintain a distance from racist polemic.

While in Berlin, he asked Karl Boemer of Hitler's Propaganda Ministry: "Why don't you treat the Jews more or less as we treat the Negroes in America? You can practice discrimination and all that, but be a little hypocritical and moderate and do not get in conflict with American opinion." As the years went on he opposed segregation, branding the "the case against integration in the schools" as one "based on odious comparisons".

In retrospect, given his status as a black man in white drag writing for the hard right, his constant references to race in America seem reckless. "He was like an arsonist who simply could not resist returning to the scene of a crime," says Horne. But in the end it was the law rather than his race that would come into conflict with his rightwing views. For, as the war was winding down, Dennis found himself on trial for sedition; he was one of 29 defendants charged with undermining the morale of the armed forces. They were accused of being part of some kind of worldwide Nazi conspiracy. (Horne describes the trial as a farcical attempt to "frame a guilty man".)

The case collapsed after the judge had a fatal heart attack. But Dennis's world was also collapsing. Friends and financial supporters distanced themselves from him. His wife, Eleanor, who had worked as both housekeeper and secretary to his one-man intellectual operation, filed for divorce in 1956. Dennis's arrogance, it seems, had been as prominent in his personal life as in his professional life. "It is just hard to believe Eleanor can be so mad," he wrote to a friend. "What jolts me is that over 62 years in which I had lots of affairs and nearly a dozen women one time or another who seriously wanted to marry ... I never had a single one turn on me. I could meet and exchange fond memories with every one of them. This is the first time a woman ever turned on me."

Their two daughters, Emily and Laura, studied at top colleges before graduating into good marriages even as their father's fortunes declined. After his divorce, with no extended family - he had had to bid farewell to them years ago in order to pass as white - he was on his own. With subscriptions to his newsletter drying up and the cold-war era dismissive of his politics, he struggled to pay his way with bits of writing and the occasional lecture. He did marry again, though, and after his second wife died he moved in with daughter Laura.

In what may have been his most audacious act of defiance, or evidence that he had