"[1] The issue centred on journalist Maximilian Harden's accusations of homosexual conduct between the Kaiser's close friend Philipp, Prince of Eulenburg, and General Kuno von Moltke.
Accusations and counter-accusations quickly multiplied, and the phrase "Liebenberg Round Table" came to be used for the homosexual circle around the Kaiser.
It led to one of the first major public discussions of homosexuality in Germany, comparable to the trial of Oscar Wilde in England.
Historians have linked the aftermath of the affair to the changes in German foreign policy that heightened its military aggression and ultimately contributed to World War I.
[3][4] Like many others, Bismarck noticed that the nature of the relationship between Wilhelm II and Eulenburg could "not be confided to paper" and felt, alongside those others, that even these activities in the private sphere were not to be exposed to the public.
[3] Beyond that, the Auswärtiges Amt suffered what the British historian John C. G. Röhl called a "culture of intrigue" with German diplomats forever forming factions to plot against one another.
[3] In May 1906, Holstein sent Eulenburg an extremely insulting and rude letter alongside a challenge to fight a duel to the death.
Wilhelm II, informed of the growing story, responded by requiring the resignation of three of fifteen prominent aristocrats, Hohenau, Moltke, and Count Johannes von Lynar, listed as homosexual by the Berlin vice squad; however, the actual list, not shown to Wilhelm II, contained several hundred names.
Testifying against Moltke were Lilly von Elbe, his former wife of nine years, a soldier named Bollhardt, and Dr. Magnus Hirschfeld.
Elbe described the lack of conjugal relations, happening only on the first and second night of their marriage, Moltke's overly close friendship with Eulenburg with whom he was always spending too much time, and her ignorance of homosexuality.
Adolf Brand, founder of the first homosexual periodical, Der Eigene (The Unique), had printed a pamphlet which described how Bülow had been blackmailed for his sexuality and had kissed and embraced his private secretary Max Scheefer at male gatherings hosted by Eulenburg, and thus was morally obliged to publicly oppose Paragraph 175 .
Elbe, through a diagnosis of classical hysteria, and Hirschfeld, by retracting his earlier testimony, were discredited and Harden was convicted of libel and sentenced to four months imprisonment.
[3] In November 1908, the chief of the Military Secretariat Dietrich von Hülsen-Haeseler died of a heart attack while performing a pas seul dressed in a woman's ballet tutu for Wilhelm II and his hunting party, requiring further damage control in the form of a cover up.
[3] Harden, like some in the upper echelons of the military and Foreign Office, resented Eulenburg's approval of the Anglo-French Entente, and also his encouragement of Wilhelm to rule personally.