Lohmann Affair

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The Lohmann Affair, also known as the Phoebus Affair, was a scandal in Germany’s Weimar Republic in 1927–28. A secret rearmament program was uncovered during the bankruptcy of the Phoebus Film AG company.

Captain Walter Lohmann, who ran the Navy’s transport department, secretly managed large funds. After World War I, money came from illegal sales of ships and submarines and from the so‑called Ruhr Funds, which were intended to prepare Germany for possible resistance during the Ruhr occupation.

Most of the secret money was used for covert weapons work, especially in Italy, and to build a tanker fleet. Lohmann also invested in civilian projects. He was friends with Phoebus Film’s director Ernst Hugo Correll and helped his girlfriend, Else Ektimov, with a large apartment and a good job.

From 1924, Lohmann put a lot of money into Phoebus Film AG. When Phoebus needed more credit, Lohmann obtained it from the Girozentrale, but only after getting a guarantee from the parent company, Lignose AG, which made nitrates for explosives and also owned a film studio business. Lohmann said the government would not be liable for these guarantees.

In August 1927 Phoebus was near collapse. A former Phoebus employee told journalist Kurt Wenkel about Lohmann’s investments, and Wenkel published details in August 1927. The government tried to limit the damage, and some of the articles were suppressed.

The scandal led to political consequences. Reichswehr Minister Otto Gessler resigned on January 19, 1928. On September 30, 1928, his successor Wilhelm Groener dismissed Admiral Hans Zenker, Lohmann’s direct supervisor. Lohmann retired, his pension was cut, and he was never prosecuted. He died three years later of a heart attack.

The secret rear­mament program did not end; it continued under new controls. Naval intelligence was merged into the Army’s defense command in 1928. A government aviation and military-related network continued to attract scrutiny, and in 1929 a Die Weltbühne article revealed more details, leading to the imprisonment of the author and publisher. The dismissal and budget questions spurred calls from the SPD for tighter oversight of army and navy spending.