Born in Attnang-Puchheim, Upper Austria, as the son of a social democratic engine driver and a master baker's daughter, Peter joined the Nazi Party in 1938 and volunteered for the Waffen-SS at the age of 17.

During World War II, he served at the western and eastern fronts and achieved the rank of Obersturmführer in the 10th regiment of the 1st SS Infantry Brigade.

Parts of this brigade were attached to Einsatzgruppe C. The Einsatzgruppen systematically shot hundreds of thousands of Jews, Romani, communists, and others behind the front during the summer of 1941.

The FP was initially a more pronouncedly nationalistic spin-off and rival of the declining national-liberal and post-Nazi Federation of Independents (VdU).

Under Peter's chairmanship, the FPÖ attempted to gain a reputation to become a potential coalition partner and tried to give a liberal impression on the outside.

Simon Wiesenthal, at that time head of the Jewish Historical Documentation Centre in Vienna, published a report on Friedrich Peter's Nazi past after the 1975 elections.

Chancellor Kreisky, who had himself been persecuted by the Nazis, defended Peter and accused Wiesenthal of employing mafia methods and of collaboration with the Gestapo.

Peter spoke of a "shameful lapse" of Haider, saying that this statement "forced him to break his self-imposed silence and to remind party leaders of their political and statutory responsibilities in public."