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In 1943, the government indicted the German-American Vocational League, its subsidiary DAB Recreational Resort, Inc., and 27 individual members for conspiring to violate FARA. This case is still the largest ever FARA prosecution.

Three years after the trial, the Third Circuit affirmed the convictions and held that the question was simply “whether agency in fact existed,” measured against the Restatement of Agency. The decision rejected the argument that the absence of an operative written contract precluded agency, and it anchored FARA’s threshold “agent” inquiry in common-law agency principles. The case is also the leading example from the statute’s early years of FARA enforcement against a domestic organization that presented itself as a social and recreational society.

The League and its German connections

The German-American Vocational League (Deutsch-Amerikanische Berufsgemeinschaft, or “DAB”) presented itself as a fraternal and recreational society for German-American workers. It maintained chapters in 12 American cities and, through DAB Recreational Resort, Inc., operated Camp Bergwald at Pompton Lakes, New Jersey.

According to the indictment, the League’s real ties ran to Berlin. The government alleged official connections with:

• the German Labor Front (Deutsche Arbeitsfront), to which the League remitted dues;
• the Nazi youth organization;
• the German Ministry for Public Enlightenment and Propaganda;
• the German Authority for Tourism and the German Railroads Information Office; and
• the Volksbund für das Deutschtum im Ausland (VDA), the organization charged with exercising political control over Germans living abroad.

The German Labor Front relationship was the core of the case. The League had a written contract with the Labor Front, and the Labor Front had put up roughly $13,000 to set up and equip Camp Bergwald. The defendants would later argue that this contract was “the only agreement” between them and that it had been cancelled before FARA took effect. The government’s answer, which the courts accepted, was that the contract was a cover: the League was “acting under the direction, indeed, under the domination, of the German Labor Front” regardless of what any paper said.

The indictment charged a conspiracy to violate both FARA and the Notification Act (the 1940 statute requiring registration of organizations subject to foreign control or engaged in political activity). The alleged program had eight parts. The League, the government said:

1. published papers praising Nazism and urging readers to keep America out of the war, “for the purpose of deluding the American people until such time as any help they might render to Germany’s enemies would come too late”;
2. distributed large quantities of propaganda through literature, motion pictures, and lectures;
3. recruited skilled workers of German descent and financed their return to Germany;
4. paid for selected individuals to attend schools in Germany to be trained in National Socialist tactics;
5. communicated in code with, and received instructions from, Germany;
6. set up and equipped Camp Bergwald, with $13,000 from the German Labor Front, for disseminating propaganda, teaching National Socialism, developing its youth organization, and attracting new members;
7. concealed its true character as an agent of the German Government by masquerading as a fraternal and recreational society; and
8. raised money for the use of the German Government.

The seventh allegation—concealment of agent status behind a fraternal-society facade—went to FARA’s core disclosure purpose, and it framed the agency question that would decide the appeal.

Trial and outcome

The case narrowed considerably before verdict. The count charging conspiracy to violate the Notification Act was dismissed, and the cases of eight defendants, three of whom were in Germany, were severed. Of the 21 defendants who went to trial on the FARA conspiracy count:

The two convicted organizations were fined $5,000 each. Six of the convicted individuals (Schroeder, Bertram, Gibbe, Bremer, Koehn, and Lieblien) received two-year prison terms, the statutory maximum at the time. Schmidt received five years’ probation.

In United States v. German-American Vocational League, 153 F.2d 860 (3d Cir. 1946), the Third Circuit affirmed the convictions in an opinion by Judge McLaughlin, with Judge Biggs dissenting. The decision is the most doctrinally significant appellate ruling under FARA from the statute’s first decade.  The defendants’ principal argument in the appeal was that their written contract with the German Labor Front was the only agreement between them, that it had been cancelled before FARA’s effective date, and that no registration obligation could arise without an express contract. The court rejected the premise. Reading the statutory phrase “acts or engages or agrees to act,” it held that FARA reaches agency relationships established by conduct, not only those memorialized in writing:

The true test, we think, was whether agency in fact existed, with the term agency defined substantially as in the Restatement of Agency, Section 1, which states it to be: "The relationship which results from the manifestation of consent by one person to another that the other shall act on his behalf and subject to his control, and consent by the other so to act.”

Applying that test, the court found sufficient evidence that the written contract served as a cover for the League’s propaganda activities on behalf of the Reich, and that the League was “acting under the direction, indeed, under the domination, of the German Labor Front.” The roughly $12,000 to $13,000 the League received from the Labor Front was treated as evidence of the relationship rather than as its defining feature.

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