I don't want kids near BIL but, that'd forfeit all family gatherings EDIT: pg 9 looking for opinions

Dh comes from a large family, most of whom are awesome. 8 siblings, 7 are great with successful jobs and sweet families. But there's one brother that I just don't want around my kids. He's mentally ill, he's been involuntarily admitted twice in the last two years to a mental facility, he uses a lot of various drugs, he is dirty and filthy and an all around poor influence. I hate smokers and he smokes several packs a day and doesn't shower for weeks, I gag being near him. He has track marks on his arms and his wrists are all sliced up. He also just recently decided he wants to be a woman so, rather than shower and clean up or really change anything he still acts the same (like a teenage punk) but is now very weirdly just a man in an ill fitting dress, padded bra, blue eye shadow, and crazy blush. He pulled a knife on his uncle last week when asked to leave a gathering and is all around scary. But, being DH's little brother, DH feels very accountable and wants to extend a welcome open invitation and love. The grandma, mother, and father feel the same. Well, I don't. No Bad influences will be around my children. Mother in law is aware of my stance, yet invited him over while babysitting when I was gone. My older children freaked out and hid. It was only her third time ever babysitting and it was her last. But he's at all family parties, if we go to visit DH's grandma the brother is there, we can't see DH's family without being around him. I on purpose did not invite him to a baptism recently and he still showed up with mother in law.... In a fishnet tank top in church. Anyway, long story short, I'm going to follow my instincts. My kids aren't going to be where he is, he's dangerous and an awful influence. But what do I do about family get togethers and the rest of the family that have told me to not cause a rift and to suck it up. I love DH's grandma and who knows how long she'll be around. His aunts are fabulous, holidays are so fun. But he's not safe for them to be around. Even with 50 people there I don't feel okay with it. What would you do? Mother in law is fiercely "mama bear" protective of him. Oh, and he's been to our house once years ago and stole $300. DH hired him to work for a weekend, paid him up front and he disappeared. DH "doesn't want to talk" about it and happily forgives.