The Lohmann Affair

The Lohmann affair or Phoebus affair was a scandal in the Weimar Republic in Germany in 1927, that was the uncovering of a secret rearmament program in the course of the bankruptcy of the production company Phoebus Film AG. In addition to the dismissal of Walter Lohmann on 19 January 1928 and the dismissal of the Chief of the Reichsmarine Hans Zenker, on 30 September 1928, it also led to the resignation of the Reichswehr Minister Otto Gessler.[1]

Secret Rearmament

In early 1923 Captain Walter Lohmann, who had acquired experience in international business, gained command of the Maritime Transport Department of the Navy in October 1920, and whose primary responsibility was logistical matters. With the full confidence and trust of naval chief Admiral Paul Behncke, he was transferred to managing the black funds of the Navy that were generally used for covert funding. It was, initially, proceeds of approximately 100 million gold marks from the illegal sale of ships and submarines scrapped in 1919 and 1920, which actually would have to be scrapped, under requirements of the Treaty of Versailles. In addition Ruhr Funds submitted by the Cabinet without the knowledge of the Parliament, were added to the fund, of which a portion for the marine of 12 million German gold marks, were to be used to prepare for military resistance in the Occupation of the Ruhr crisis.[2] Defense Minister Otto Gessler wrote in his memoirs:

Lohmann was to ensure primarily and in all circumstances secrecy. He had to stand straight in the event of a breakdown [in getting it done] (German: Getane), that is, to take everything on his own cap as a pure privation. He received the assurance of personal honor protection.

— Otto Gessler, Reichswehr politics in the Weimar period, S. 446

The funds for the Ruhr fund were mainly used for the secret sale of weapons, especially in Italy, and for the construction of a tanker fleet. But the activities went far beyond that:

Economic Activities

In addition, Lohmann began investing in commercial projects:

  • Property speculation
  • Purchase of the Berlin Bacon AG, with which he wanted to dispute the British Speck market to the Danes
  • Purchase of a private bank shares bank Berliner Bankverein (the bank through which Lohmann financed all activities)[6]
  • Development of an ice rescue process
  • Participation in and guarantees for Phoebus-Film AG, (see below)

There were various explanations for these non-maritime activities:

  • They should be indirectly in the interests of the navy, e.g. Berlin Bacon AG's refrigerated vessels could also have been used as troop carriers during the war[7]
  • They should serve the unobtrusive construction of an agent network
  • They should conceal the financing of the secret projects
  • They should replace the lack of funds inflow through economic success[8]

Lohmann, on the other hand, received explanations of honour from all sides, that he had not personally enriched himself. But he was also told that he had been a friend of the Phoebus Director Ernst Hugo Correll and had given his girlfriend Else Ektimov (or Elke Ekimoff) a 12-room apartment and a well-paid job at Phoebus.[9]

Since 1924, Lohmann had been involved with Phoebus-Film AG company. In addition to high returns, he also had the goal of being able to place agents in the Phoebus offices abroad without inconspicuous agents. When Phoebus got into trouble, he got her credit from the Girozentrale. He received the signature for the required guarantee only because he presented a further guarantee from the parent company, Lignose AG , which had priority. In fact, he had assured the Lignose, on the other hand, in the name of the empire, that it was not claimed for this guarantee. Later, he signed his own self-sufficient guarantees.

When bankruptcy in August was no longer averted, the financing arrangement collapsed.[10]

Exposé

Kurd Wenkel, an economic journalist of the Berlin daily newspaper, had wondered since the middle of July 1927, through which inflows the company could delay its collapse for so long.[1] After a former Phoebus employee informed him about the Lohmann investments, Wenkel publicly published the scandal in articles on August 8 and 9. He was probably not aware of the real background, but suspected that the state had in the national sense to influence the program and the rental policy of Phoebus, which was not quite unjustified, because in the shallow program of the Phoebus (one does not participate Of love ), a few nautical injections were noticeable (the northbound journey of German warships).

The government under Reichskanzler Wilhelm Marx tried to limit the damage. The Wenkel articles were removed from publication under threat of prosecution for treason. The remote economic activities were portrayed as the authority of a subordinate official, and the Phoebus scandal became the Lohmann affair. The secret rearmament activities, and thus the breach of the Treaty of Versailles, could be hushed up. Although the KPD deputy Ernst Schneller in the Reichstag asked very precisely for details of the upgrade program, he was ignored.

The Reichstag approved the costs for the settlement of the affair of 26 million RM only after the resignation of Reichswehrminister Otto Gessler on January 19, 1928. On 30 September, Gessler's successor Wilhelm Groener, dismissed the chief of the Reichsmarine, Admiral Hans Zenker, the direct superintendent of Lohmann. Lohmann himself was retired when his pension was abridged, but he was never prosecuted, because the risk of uncovering the true background of the affair would have been too great. Lohmann died completely impoverished three years later of a heart attack.[11]

The secret rearmament was not stopped, but extended, but subject to independent and secret control by the Court of Auditors.[11] The naval intelligence service was merged into the defense of the army in 1928.[12] The Severa was taken over by the Lufthansa as a coastal flight, although it already had a sea-flight department.[13] (see Lufthansa's history)

Other Revelations

When the funds for the construction of an officer school in Friedrichsort, close to Kiel were applied for in the supplementary budget of the republic of 1926, the parliamentary deputy, during the Parliamentary debate, came to the conclusion that the school had already been built and had been inaugurated by the head of the naval leadership, Hans Zenker. The SPD suspected black coffers and demanded that the resources of the army and the navy should be limited by their budgetary resources and that their use should be monitored more closely.[14]

During 1929 appeared in the world stage an article, about the German aviation industry, in the magazine Die Weltbühne, which revealed individual details of the continued secret armoury. The author Walter Kreiser (pseudonym: Heinz Jäger) and the publisher Carl von Ossietzky were condemned to 18 months imprisonment in the world stage process for treason of military secrets.

Literature
  • CIA-Report: The Lohmann Affair. Studies in Intelligence 4, Heft 2 (Spring 1960): A31-A38. RG059 30. January 2010 aufgerufen.
  • Files of the Reich Chancellery regarding Walter Lohmann obtained from the German Federal Archives 13. February 2017
  • Otto Gessler : Reichswehr politics in the Weimar period. Hrsg. v. Kurt Sendtner, Stuttgart 1958.
  • Francis L. Carsten: Reichswehr and policy, 1918–1933, Köln 1964.
  • Bernd Remmele: The maritime secret armament under Captain z.S. Lohmann. In: Military-historical releases 56, 1997, S. 313–376.
  • E.S.: The Phoebus scandal. In: The International, 11, Heft 7 (1. April 1928), S. 193 ff. Reprint: The International 9, Neue Kritik KG Frankfurt, 1972, ISBN 3-8015-0082-9.
  • Heinz Jäger: Windiges aus der Deutschen Luftfahrt. In: Die Weltbühne 11, 1929.
  • Wilhelm Th. Wulff "Tierkreis und Hakenkreuz" Gütersloh 1968 Ss.78 - 101 Kapitel "Kapitän Lohmann und der Phoebus-Filmskandal."

References
  1. "The Lohmann Affair". cia.gov. CIA HISTORICAL REVIEW PROGRAM. 22 December 1993. Retrieved 4 March 2017.
  2. "CIA-Report: The Lohmann Affair. Studies in Intelligence - Issue 2, S. A32" (PDF). cia.gov. Retrieved 4 March 2017.
  3. Williamson R. Murray; Allan R. Millett (13 August 1998). Military Innovation in the Interwar Period. Cambridge University Press. p. 232. ISBN 978-0-521-63760-2.
  4. "CIA-Report: The Lohmann Affair. Studies in Intelligence - Issue 2, S. A33" (PDF). cia.gov. Retrieved 4 March 2017.
  5. Francis L. Carsten: Reichswehr and Politics, 1918-1933, Cologne 1964, p. 314
  6. "CIA-Report: The Lohmann Affair. Studies in Intelligence - Issue 2, S. A36" (PDF). cia.gov. Retrieved 4 March 2017.
  7. "CIA-Report: The Lohmann Affair. Studies in Intelligence - Issue 2, S. A34" (PDF). cia.gov. Retrieved 4 March 2017.
  8. Otto Gessler: Reichswehrpolitik in the Weimar period. P. 448
  9. Berlinische Monatsschrift 6/2000
  10. "CIA-Report: The Lohmann Affair. Studies in Intelligence - Issue 2, S. A35" (PDF). cia.gov. Retrieved 4 March 2017.
  11. "CIA-Report: The Lohmann Affair. Studies in Intelligence - Issue 2, S. A37" (PDF). cia.gov. Retrieved 5 March 2017.
  12. Gert Buchheit: The German Secret Service. Munich; List Publisher 1966
  13. Heinz Jäger: Windiges from the German aviation industry . In: The World Stage 11, 1929
  14. Caspar, Gustav Adolf: The Social Democratic Party and the German Wehrproblem in the Years of the Weimar Republic , in: Supplement 11 of the Wehrwissenschaftlichen Rundschau, Stuttgart 1959, p. 72
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