Labour Front Head
In 1931, Ley was brought to the Nazi Party's Munich headquarters to take over as head of the party organisation (Reichsorganisationsleiter) following Hitler's dismissal of Gregor Strasser in an internal dispute. Ley's poor background and his experience as head of the largely working-class Ruhr party region meant that he was sympathetic to the socialist wing of the Nazi Party, which Hitler opposed, but he always sided with Hitler in inner party disputes. This helped him survive the hostility of other party officials such as the party treasurer, Franz Xaver Schwarz, who regarded him as a drunken incompetent. When Hitler became Chancellor in January 1933, Ley accompanied him to Berlin. In April, when the trade union movement was taken over by the state, Hitler appointed him head of the German Labor Front (Deutsche Arbeitsfront, DAF).
The DAF took over the existing Nazi trade union formation, the National Socialist Factory Cell Organisation (Nationalsozialistische Betriebszellenorganisation, NSBO) as well as the main trade union federation. But Ley's lack of administrative ability meant that the NSBO leader, Reinhard Muchow, a member of the socialist wing of the Nazi Party, soon became the dominant figure in the DAF, overshadowing Ley. Muchow began a purge of the DAF administration, rooting out ex-Social Democrats and ex-Communists and placing his own militants in their place. The NSBO cells continued to agitate in the factories on issues of wages and conditions, annoying the employers, who soon complained to Hitler and other Nazi leaders that the DAF was as bad as the Communists had been.
Hitler had no sympathy with the syndicalist tendencies of the NSBO, and in January 1934 a new Law for the Ordering of National Labour effectively suppressed independent working-class factory organisations, even Nazi ones, and put questions of wages and conditions in the hands of the Trustees of Labour (Treuhänder der Arbeit), dominated by the employers. At the same time Muchow was purged and Ley's control over the DAF re-established. The NSBO was completely suppressed and the DAF became little more than an arm of the state for the more efficient deployment and disciplining of labour to serve the needs of the regime, particularly its massive expansion of the arms industry.
Once his power was established, Ley began to abuse it in a way that was conspicuous even by the standards of the Nazi regime. On top of his generous salaries as DAF head, Reichsorganisationsleiter, and Reichstag deputy, he pocketed the large profits of the Westdeutsche Beobachter, and freely embezzled DAF funds for his personal use. By 1938 he owned a luxurious estate near Cologne, a string of villas in other cities, a fleet of cars, a private railway carriage and a large art collection. He increasingly devoted his time to "womanising and heavy drinking, both of which often led to embarrassing scenes in public." In 1942 his second wife Inge shot herself after a drunken brawl. Ley's subordinates took their lead from him, and the DAF became a notorious centre of corruption, all paid for with the compulsory dues paid by German workers. One historian says: "The DAF quickly began to gain a reputation as perhaps the most corrupt of all the major institutions of the Third Reich. For this, Ley himself had to shoulder a large part of the blame."
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