He returned to Germany in 1938 to work in propaganda for the Deutscher Fichte-Bund with responsibility for Ireland, the United States, and Canada, attempting to cultivate ties in the U.S. through correspondence with Irish-Americans and anyone who might be sympathetic to German interests.

He was recruited to the Abwehr, the German military intelligence agency, which sent him to Ireland in 1939 to make contact with the Irish Republican Army (IRA) and others who might help Germany.

[6] In his letters, Pfaus said he had served in the United States Army, in the Sixth Corps at Fort Sheridan, Illinois, and at Camp Custer, Michigan.

[10] According to Ladislas Farago, in Nazism he at last found a cause "worth fighting for" and he accompanied his devotion to it with the development of a philosophy of "Global Brotherhood" for which an acolyte was said to have nominated him for the 1932 Nobel Peace Prize.

[10] Pfaus also started a Nazi group in New York with the Swedish-born Olov Edvin Tietzow, founder of The American Guard.

[7] Records of the NSDAP (Nazi Party) show that in 1936 he was an informant for the Reichspressestelle (Reich Press Office) on German matters in the United States.

[17] Pfaus returned to Germany in 1938 at the suggestion of Tegeliss Tannhaeuser, the German consul in Chicago,[8] to head the American-Canadian-Irish section of the Deutscher Fichte-Bund, the Nazi propaganda agency in Hamburg.

The IRA subsequently declared war on Britain and began a series of bomb attacks in England on January 16 under the S-Plan or Sabotage Campaign.

[21][22] Accordingly, in February 1939, Abwehr II, the department responsible for relations with discontented minorities,[18] sent Oscar Pfaus to Ireland under the cover of being a journalist for a German newspaper to make contact with the IRA, the first of 13 agents they sent in 1939–43.

[21] As well as the IRA, Pfaus was also able to meet individuals from the wider Irish nationalist and republican movements which contained strands of pro-fascism, anti-Semitism, and anti-communism.

Another of Pfaus's contacts was Maurice O'Connor, an Irish railway clerk who had visited Germany and was pro-Nazi and later took a significant role in the CCOG as it became more radical.

Sweney refused, feeling the work too "dirty", but travelled to Berlin with Pfaus and his colleagues where she made propaganda broadcasts to Scotland (as Ann Tower) and Ireland.

[36] He continued to write letters, having one published in a Canadian paper in 1949 in which he complained that "those who did away with the former Prussian regimes of terror" in Germany had failed to replace them with democracy and justice.