The German officer in question was Dietrich Schulz-Koehn, who, obsessed with "hot swing," published an underground newsletter reporting on the jazz scenes in cities under Nazi occupation. "Dr. Jazz" was the pen name Schulz-Koehn used for the illegal publication.
A script never materialized, but not for lack of Kubrick's passion. The director's longtime assistant Tony Frewin, speaking to the Atlantic, said that Kubrick "was a great swing-era jazz fan," and that he had very much wanted to use a specific Harry James track in "Dr. Jazz." But: Woody Allen unwittingly beat him to the punch, using the piece in "Hannah and Her Sisters." "It really miffed Stanley," Frewin told the Atlantic.
Here's our coverage of the Stanley Kubrick exhibit at LACMA.