New Egypt More Distrustful Than Old, U.S. Groups Say
The Wall Street Journal
By Adam Entous and Julian E. Barnes

WASHINGTON—After last year's popular revolt toppled Egyptian leader Hosni Mubarak, U.S. democracy-building groups thought they would gain acceptance from a government that had long viewed them with suspicion.

Instead, election experts from the U.S. say they have faced a level of harassment from Egypt's new rulers that outstrips what they experienced under Mr. Mubarak's iron-fisted rule.

For years, U.S.-funded democracy-building groups have run afoul of authoritarian rulers over their stated mission to monitor elections and assist local political parties. In Mr. Mubarak's Egypt, such groups typically operated in a legal limbo: Official approval to operate was withheld in what was widely viewed as leverage that would allow the government to shut groups down quickly if necessary.

In post-Mubarak Cairo, government critics of the groups still say the organizations undercut Egyptian sovereignty and operate outside the law. Some Egyptian officials recently have even suggested that the groups are involved in subversion and espionage, charges the groups strongly deny.

The confrontation with Egypt plumbed new depths this week when the country said 43 people face charges of violating the country's foreign funding laws for nongovernmental organizations. Egypt said the list included 19 Americans; the State Department said Tuesday that 16 Americans were affected.

None of the Americans have been arrested and fewer than half of them currently reside in Egypt, making it unclear how Egypt intends to prosecute them.

One of those threatened with prosecution is Sam LaHood, the Egypt director of the Washington-based International Republican Institute and the son of U.S. Transportation Secretary Ray LaHood. Five employees of Washington's National Democratic Institute and three Freedom House workers have also been named.

The confrontation stems in part from a dispute between the U.S. and Egyptian governments over whether Cairo should have the power to decide which locally based NGOs get U.S. democracy-building funding.

Egypt's military leaders and its interim government demanded that the State Department, U.S. Agency for International Development and U.S.-based pro-democracy groups seek Egyptian approval for the grants the U.S. side gives to the local NGOs working on the programs.

The Obama administration and the U.S.-based groups rebuffed the demand. The U.S. has been awarding grants to groups without seeking Cairo's consent, angering its leaders.

Egyptian officials maintain that as applied to the U.S. groups, the term "nongovernmental organization" is a misnomer, considering that most of their funding comes from the U.S. Congress.

NDI and IRI have operated in more than 100 countries since they were established in 1983. They are loosely affiliated with the two main U.S. political parties. NDI's board of directors is led by former Secretary of State Madeleine Albright, a Democrat. IRI's board is led by Sen. John McCain, an Arizona Republican. Freedom House was founded by Wendell Willkie, a Republican, and Eleanor Roosevelt, a Democrat. Its board includes people who have served in both Democratic and Republican administrations.

The groups get most of their funding from the U.S. government and other international development agencies. Freedom House, for example, receives more than 80% of its funding from the U.S. government, but also receives grants from American foundations and the government of the Netherlands.

U.S.-funded political party-building work is particularly sensitive in a country like Egypt, which recently opened its political system to Islamist parties hostile to the U.S. and its closest ally in the region, Israel.

In the past, Washington has pushed NDI and IRI to work exclusively with secular parties. But the Obama administration cleared the way for NDI and IRI to engage with Islamist political groups, including those associated with the Muslim Brotherhood, though Islamist parties showed little interest in taking part in U.S.-funded programs.

Tensions with Mr. Mubarak's regime started as early as 1995, when NDI began running programs in the country. Both NDI and IRI opened offices there in 2005 and have been trying without success to register with the government.

NDI and IRI were allowed to informally assess Egypt's 2005 presidential and parliamentary vote. They found that turnout was far lower than government figures had previously asserted. Mr. Mubarak didn't allow the groups to monitor the country's 2010 parliamentary election. Massive irregularities at the polls that year helped set the stage for popular protests in early 2011 that forced Mr. Mubarak out.

Since Mr. Mubarak's fall, NDI and IRI have expanded their programs with new offices in Alexandria and Upper Egypt. Both groups believed registration was imminent in 2005 and 2006 when their applications were submitted. After Mr. Mubarak's ouster, the groups were hopeful of making progress with the new government but were later told that the government wasn't yet prepared to address the matter.

A month after the Freedom House's office was opened in Cairo, the Egyptian government announced an investigation of the NGOs. In December, the Egyptians raided the NGOs' offices, then banned travel by Americans accused of violating the country's foreign funding laws.

"There was no real Arab Spring for us," said Charles Dunne, the director of Middle East programs at Freedom House, who was one of the people purportedly indicted by Egypt.

The Obama administration has condemned Cairo's actions and has warned that U.S. aid to Egypt was in jeopardy.

During Mr. Mubarak's reign, Congress repeatedly threatened to cut Egypt's military aid to protest the Egyptian government's refusal to register pro-democracy NGO groups.

But the congressional threats were never fulfilled, reflecting Egypt's lobbying clout and U.S. concerns about penalizing a pivotal ally in the region.

"It may be we have taught the Egyptian army that these threats to cut aid are not serious," said Elliot Abrams, a senior Bush administration official now with the Council on Foreign Relations. "Now it is a real possibility and they don't quite recognize it."

Despite the U.S. threats, Egyptian leaders have shown few signs they are prepared to end the standoff.

A delegation of Egyptian military officers abruptly canceled a meeting scheduled for Wednesday with Sen. McCain, who heads the IRI board, and other lawmakers from the Senate Armed Services committee.

The U.S. groups say they are trying to work with the Egyptian legal system to counter the charges against their employees there. They are also pressing the Obama administration and Congress to intervene more forcefully on their behalf.

"We are in touch with members of Congress to sensitize them to what is going on in Egypt and the fact that we are subsidizing the Egyptian military, which is carrying out these attacks on civil society," Mr. Dunne said. "This is a war on civil society in Egypt in general."

Matt Bradley in Cairo contributed to this article.