In 1933, he became involved in a controversy known as the Business Plot, when he told a congressional committee that a group of wealthy industrialists were planning a military coup to overthrow Franklin D. Roosevelt, with Butler selected to lead a march of veterans to become dictator, similar to other Fascist regimes at that time. The individuals involved all denied the existence of a plot and the media ridiculed the allegations. A final report by a special House of Representatives Committee confirmed some of Butler's testimony.
In 1935, Butler wrote a book titled War Is a Racket, where he described and criticized the workings of the United States in its foreign actions and wars, such as those he was a part of, including the American corporations and other imperialist motivations behind them. After retiring from service, he became a popular activist, speaking at meetings organized by veterans, pacifists, and church groups in the 1930s.