Follow the Egyptian money

Egypt, House of Rendition and Torture for US/Israel. No More.

By Glenn Kessler

"So in addition to supporting institutions and free and fair elections, we are committed to supporting strong civil societies, the activists, organizations, congregations, intellectuals, reporters who work through peaceful means to fight corruption and keep governments honest. Their work enriches the soil in which democracy grows."
--Secretary of State Hillary Rodham Clinton, Feb. 5, 2011
The Egyptian protests have thrown a spotlight on what the Obama administration has done in its first two years to help promote democracy in Egypt. The administration has claimed that it privately pressed Egyptian President Hosni Mubarak for changes, but we have documented how President Obama, at least in his public statements, tended to play down the need for specific actions by the Egyptian government.
Clinton's statement, made while discussing the turmoil in the Middle East during a security conference in Munich, raises another question: How committed has the administration been to supporting democracy-minded civic and social organizations -- what are known collectively as civil society-- in Egypt? To find out the answer, we need to follow the money.

The Facts
Since the Camp David peace accords more than three decades ago, the United States and Egypt have had an unspoken bargain in terms of the roughly $2 billion in aid given each year to Cairo: The Egyptian government had veto power over which nongovernmental organizations (NGOs) could receive the money. This deal meant that funds labeled by Washington as promoting democracy often ended up being used for other projects, such as sludge removal or to bolster the very judicial institutions used to jail democracy advocates.
Meanwhile, the largest chunk of the annual largess, about $1.3 billion, was given to Egypt's military and security forces. The security forces have been repeatedly cited in the State Department's human rights report for torture, prolonged detentions without charge and other abuses. While overall aid to Egypt has declined in recent years, the budget for the security forces and the military has remained mostly intact.
The George W. Bush administration tried to change the dynamic regarding civil society funding, though its effort met with fierce resistance by the Egyptian government. There were banner headlines in the Egyptian press the first time a U.S. ambassador actually gave money to institutions that were independent of Hosni Mubarak's regime, even though the funds amounted to just $1 million. One Egyptian newspaper called it a "bombshell announcement."
The Bush administration's effort was also backed by Congress, which tried to condition aid on improvements in Egypt's human rights record and directed that "assistance shall not be subject to the prior approval by the government of any foreign country."
Egyptian entities that took money directly from the United States ran the risk of being labeled American stooges by Egypt's state-run media. A 2009 audit of Egyptian aid by the USAID inspector general found that the results of the U.S. government's democracy effort were mixed, though the "greatest success" was achieved in programs funded directly by the United States.
"A major contributing factor to the limited achievements for some of these programs resulted from a lack of support from the Government of Egypt," the report said. "According to a mission official, the Government of Egypt has resisted USAID/Egypt's democracy and governance program and has suspended the activities of many U.S. NGOs because Egyptian officials thought these organizations were too aggressive."
Toward the end of Bush's term, his fiscal year 2009 budget proposed spending $45 million on democracy and good-governance programs in Egypt, including more than $20 million on promoting civil society. This would have kept the amount earmarked for democracy programs the same as 2008, even as spending in other areas, such as health, education and economics, was scheduled to be reduced in what is known as the Economic Support Fund as part of a reordering of priorities.
"The United States has developed strategic partnerships with reformers from Egyptian civil society and within governmental institutions," the administration said in a document to Congress. "While some democracy and governance activities, such as reforming the judiciary, will be implemented through direct assistance to the GOE [Government of Egypt], assistance to civil society and other non-governmental organizations (NGOs) will be funded directly."
But that nascent effort was largely shelved when the Obama administration took office. For fiscal year 2009, the administration immediately halved the money for democracy promotion in Egypt; the civil society funds were slashed 70 percent, to $7 million.
Meanwhile, money that was to be given directly to civil society groups was eliminated and the administration agreed to once again fund only those institutions that had Mubarak's seal of approval. Jennifer L. Windsor, an associate dean at Georgetown University's School of Foreign Service and former executive director of Freedom House, said she was told at the time by U.S. Ambassador Margaret Scobey that the shift was made to "facilitate" better relations with Egypt's government.
The new policy received little public notice at the time but is documented in official government documents and also on the USAID Web site. Obama's 2010 budget justification to Congress eliminated all mention of giving direct assistance to civil society groups. The 2011 budget proposed modestly increasing democracy funding -- from $20 million to $25 million, with $8.5 million going to civil society groups -- and explicitly stated that "grants will be made to Egyptian registered NGOs."
Freedom House, a bipartisan democracy advocate, tried to sound a warning in 2009 about the reductions. After the administration halved democracy funding for Egypt, Freedom House said in its analysis of the foreign aid budget, "The Obama Administration should reassess this reduction in support and strengthen its diplomatic efforts on behalf of independent democracy and human rights activists in this important country."
In 2010, Freedom House again raised an alarm, and added: "We have serious concerns about the US Government decision to stop funding civil society groups not registered with the Egyptian Ministry of Social Solidarity, essentially giving the Egyptian Government veto power over who receives funding from USAID. Not only is this decision harmful to civil society groups in Egypt, it sets a dangerous precedent in terms of U.S. foreign assistance." It also noted that although the administration indicated it might offset the cuts in bilateral aid with increased funding from other entities--the State Department suggests this totaled $6 million in 2010--"it is not clear that has been the case."
The Obama administration signaled it would cut democracy funding for Egypt within weeks of taking power, even before the president went to Cairo and made his famous speech on outreach to the Muslim world.
Just days before his address, a group of Middle East experts debated the issue on a Harvard University blog. Windsor wrote that the decisions "were a terrible mistake."

She added that she had just returned from Cairo and "what I found most heartening was the diversity of groups and individuals who seek genuine change." They were disorganized, fragmented and needed more support, she said, but "their potential is demonstrated by the fact that the Egyptian security services have asked for a massive increase in funding" -- roughly equivalent to the cut in U.S. funding to democracy groups. "So the advocates for oppression in Egypt will get more funds, and the advocates for freedom get less," she concluded.
State Department spokesman P.J. Crowley acknowledged Wednesday that "funding for democracy activities in Egypt did drop" between fiscal year 2008 and 2009, which he attributed to the Bush administration's proposed cut in overall economic support funds. "We increased funding in fiscal year 2010 and sustained that in our proposal for fiscal year 2011 while also reorienting our approach to provide direct support to indigenous Egyptian organizations."
Crowley added: "We are currently looking at ways to expand our support to civil society in Egypt given the events that are now unfolding. Unfortunately, Congress is contemplating severe cuts in foreign assistance which potentially threaten these efforts at a time when they can have the greatest impact."

The Pinocchio Test
Clinton is certainly correct to say that the United States supports and encourages civil society groups around the world. But when it comes to Egypt, the administration's performance appears to fall short.
Obama ended a potentially promising effort to support democracy groups not beholden to Egypt's authoritarian government in order to curry favor with that government. The administration also reduced the budget devoted to promoting civil society. It is not possible to know whether the tens of thousands of people protesting every day would be better organized or have more visible leaders today if substantial direct funding had been maintained. But it would be better for the administration to admit it made a mistake than to pretend it had not changed the policy.
Two Pinocchios

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