From an earlier answer of mine

Part I: Denazification

Firstly, denazification was neither very effective nor particularly thorough. Although each of the four occupation occupation powers had different imperatives and intnetions, their denazification efforts shared a set of broad common methods. The Allied military governments would break up explicitly ideological organizations such as the Hitler Jugend, identify the major offenders and remand them to justice, and sponsor boards mostly run by Germans which would winnow out the true believers in the NSDAP from fellow travelers and bystanders. Of these three tactics, the various military governments only really accomplished the first one. The disestablishment of various NSDAP organizations was relatively easy to accomplish because the many of them were in the process of self-dissolution by their own members during the chaotic last days of the war. Accomplishing the other two goals proved quite problematic for the military governments.

Although the International Military Tribunals (IMT) at Nuremberg loom large in the collective memory of the postwar period, the reality was that the various tribunals were often marred over issues of jurisdiction, quibbling over legal norms, and tainted by the emerging Cold War. In the latter case, the growing chillness between the two superpowers precluded continuing international tribunals and they were instead carried out by each of the military governments. Although these subsequent trials did bring some Nazi perpetrators to justice, they lacked the cachet of the IMT and often had to cut legal corners to achieve justice. Prosecutors also found it increasingly difficult to elicit the support of the various military governments' chiefs who were under tremendous pressure to get Germany back on its feat in light of the emerging Cold War.

The fizzling out of prosecution and the dismantling of German industry in the Western zone illustrated the gradual disenchantment with prosecution of non-Party offenders. Going into 1945, there was common consensus among US policymakers that German business leaders had both profited under Hitler and German firms like Alkett, Rheinmetall, and Krupp were intertwined with German militarism and thus had no place in the new Germany. Although not as extreme as the Morgenthau Plan to deindustrialize Germany, Joint Chiefs of Staff policy directive (JCS 1067) of May 1945 called for the breakup of cartels and companies explicitly connected to Nazism, as well as the punishment of business leaders for their various crimes. Between 1945-47, the US military government (OMGUS) did take steps to enact JCS 1067 such as the breakup of IG Farben and the start of tribunals against Alfried Krupp as part of a wider series of trials against business leaders. But these various industrial leaders fought back casting themselves as patriotic entrepreneurs that only reluctantly dealt with Hitler to avoid a Communist takeover of Germany during the Depression. This public relations campaign dovetailed with the nascent FRG political establishment that sought to draw a fine distinction between true Nazis and those patriots who had no choice. Preserving the business elite from prosecution both served to economically restore the country as well as be a clear sign that Germany had regained its sovereignty. OMGUS's leadership proved quite receptive to these arguments when US General John McCloy replaced Lucius Clay and was more amenable to placating West German opinion and restoring the economy. As the Korean War heated up and the reconstruction of the Western European economies was starting to bear fruit, American leaders were much less concerned with breaking up West German heavy industry and instead wanted to reestablish it. The Ruhr steel industry played an important role in these plans, as reflected in the Schuman Plan which sought to reintegrate Western European coal and steel industries into a pan-European trading network. This strengthened network would render the Marshall Plan more effective and inoculate Western Europe's working classes against communism. Even though his tribunal gave Alfried Krupp a relatively mild sentence, he received both clemency and a restoration of assets seized in 1950. The Advisory Board on Clemency for War Criminals advised in 1950 that Alfried's sentence was unduly harsh and the disestablishment of Krupp's fortune was not in keeping with Allied policy towards other industrialists.

McCloy, a staunch anticommunist, portrayed clemency as in keeping with core American values. He characterized the confiscation of the Krupp fortune as "generally repugnant to American concepts of justice," and strongly denied that Cold War considerations played a part in his support of the Clemency Board's recommendations. However, clemency really fit within both the Adenauer's policy of normalizing and reintegration of the FRG into a wider Western European community and America's Cold War concerns that a strong European economy would act as a firewall against Communist political parties. The consciously selective histories perpetrated by Krupp played into these contexts as they minimized its involvement in the Third Reich and created an image of the German industrialist as an responsible bedrock for anticommunism.

The integrity of the denazification procedures were likewise sacrificed for reasons of both expedience and restoring Germany to normalcy to better fight the Cold War. The AmZone had the most ambitious and structured denazification process, with five tiers gauging political involvement with the regime and its ideology (in sequential order- major offenders, offenders/incriminated, lesser offenders, fellow-travelers/followers, exonerated). This clear structure became one of the models for the rest of the military governments for their own denazification process, but with some variations. The burden of proof often landed on these Germans themselves, and naturally they portrayed their own actions as politically neutral. In theory, the tribunals were supposed to investigate these claims to political innocence, but in practice, the denazification tribunals were woefully understaffed and overworked. Nor were the tribunals run evenly, some districts could be more lax than other, and naturally most Germans flocked to the lenient tribunals to gain what became known colloquially as a Persilschein (Persil was a common laundry detergent that washed unwanted stains out). Even though Leni Riefenstahl's was far from a typical German, her case exemplified a number of the problems inherent to the denazification process. The filmmaker and propagandist went through three denazification tribunals in the French zone, which had a more lenient system, the first two of which declared her exonerated, and the third, conducted in absentia, as a fellow traveler. These decisions created a miniature scandal in the German press and pressure for a fourth denazification hearing in Berlin reaffirmed the first ruling. Although the director clearly did benefit from the regime's patronage, it became incredibly hard for the tribunals to prove any real wrong-doing. Witnesses who testified of a woman recruiting exotic looking extras at a concentration camp could not prove the woman in question was Riefenstahl. Her decision to be tried in the French zone illustrated how some Germans were able to game the system, and the four separate trials fed into a wider sense among Germans that the tribunals were an onerous form of victor's justice. Denazification became for many Germans an unwelcome and intrusive burden for a society struggling to return to normal. There was a widespread sentiment that the tribunals punished the small fry while letting the big fish go free. Tellingly, Western zone Germans who pursued an active and stringent denazification were often defeated in FRG elections in 1949.

This is not to say that denazification did not have some victories. The Eastern zone's Neue Lehrer policy brought in a generation of new instructors with anitfascist credentials at the primary school level and these new teachers later became one of the bedrocks of the SED's corps of functionaries. Some Germans also found it hard to completely erase evidence of their malfeasance and the whole denazification process did sort of familiarize postwar Germans into what was to be acceptable ideological behavior in the postwar period. However, the efficacy of the program as a whole was undercut by from both the wider German public's resistance and the military governments' own hypocrisies which often gave sanction to assigning a lower level of responsibility to individuals whose professional skills were needed for reconstruction. By the standards the denazification program set up for itself in its rhetoric, the program was largely a collective failure as it failed to sift out various Nazi officials and inculcated patterns of alibi-making and blame-shifting among the wartime generation that proved to be quite durable through the 1990s.