Joe Eszterhas writes the story, and a year after the film's release, he learns that his own father
was being investigated by the U.S. Department of Justice for writing anti-Semitic propaganda in Hungary during the 1930s and early 1940s(Wikipedia)
The Admiral Horthy regime, in power in Hungary from 1919 to 1944, was pretty anti-Semitic, if not quite at the German Nazi level, and such propaganda would have been mainstream in that time and place. Many Central And East Europeans who got to America would in many cases have been very right-wing and some had done things they would have preferred to cover up. Eszterhas may well have known in general terms about this, though perhaps not with particular knowledge at the family level.
"Chicken soup - with a *beep* straw."