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Posted at 6:00 AM ET, 02/10/2011

Follow the Egyptian money

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

(About our rating scale).

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By Glenn Kessler  | February 10, 2011; 6:00 AM ET
Categories:  2 Pinocchios, Hillary Clinton, Middle East  
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I'm beginning to understand why Arabs hate US in America. After watching the news coverage this week on Egypt and watching Egyptian troops armed with US paid for Tanks and US paid for Guns -- and NOT hearing our President or the Europeans clearly stand up to people trying to remove a Dictator.....

I couldn't help but think of the Iranian Pilots we were training for the "Shah" to fly our F-14s -- or how Saddam Hussein was our buddy for a while. Yesterday I saw an article in USA Today that explained how important Mubarak was to US. We could send suspected terrorists there for some "real" torture and he was helping US keep the "peace" in the Middle East .... so you have to break a few eggs (or heads).

We love democracy, but really, if these people want to be ruled by an Islamic Government -- we can't allow that. They just don't know better!

If I lived there.... I think I'm beginning to understand how they feel. Perhaps US have lost our Faith in the power of Goodness and God? The enemy of my enemy is my Friend is not the right way. We eventually end up fighting them and getting killed.

Posted by: jmurtari | February 10, 2011 6:33 AM | Report abuse

Mr. Kessler, you flunked your own Pinocchio test in saying that "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."

Follow the U.S. money trail around the world since WWII. Since then the U.S. has been the most warring nation, both visible and shadow wars, in the world. Where has U.S. money gone? The answer is obvious. It has gone to the warfare industry, to the protection and expansion of our multinational corporations around the globe and to fear mongering political pawns hypocritically wrapping the flag around themselves while depending on the flow of corporate money to stay in office, and to repressive, corrupt foreign governments so that they pave the way for rapacious corporations.

When he was president, James Madison said that "of all the enemies to public liberty war is, perhaps, the most to be dreaded--."

As long as America remains a corpocracy instead of a genuine self-rule democracy war and weaponry will be where most of our money is. And the "liberty quotients" of ordinary Americans will remain as low as those of the colonists before they revolted.

Gary Brumback1

Posted by: garybrumback1 | February 10, 2011 8:11 AM | Report abuse

This is why Ron Paul advocates eliminating foreign aid to ALL countries. We gain nothing by funding tyrants.

Posted by: win_harrington | February 10, 2011 8:12 AM | Report abuse

The policies of this administration bear investigation. Our tax dollars being used to support autocracies and pseudo-dictatorships with their programs of secret jails, torture, murder is unconscionable. Oh, I forgot - Egypt is our go-to country for "torture by proxy". Can't upset that apple-cart, can we?

First I was disappointed in some actions by Obama and his administration - now that disappointment has turned to disgust and from there it is a small step to anger. "Democracy"? Only for the chosen few. Programs to improve the lives of those living in oppressive regimes? Little to none, but major support for the military that carry out the orders of the autocratic governments.

Posted by: Utahreb | February 10, 2011 8:55 AM | Report abuse

>>>>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."

Obama's first budget was 2010.

Posted by: angie12106 | February 10, 2011 9:54 AM | Report abuse

The dems first budget approval was 2007 - when they gained the majority. It is not at all surprising to me that the dems and Obama decided to send more money to a dictator who is probably tied tightly to the muslim brotherhood and stop sending funds to those seeking a democracy. Obama and his administration have been working against the American people both at home and abroad. He and his administration should resign at once. Or be tried for treason!

Posted by: annnort | February 10, 2011 10:39 AM | Report abuse

The Bush administration came up with the increased money for "civil society" programs by cutting money set aside for farm aid, health care, and other services that were directly affecting poor Egyptians.

Those services that were cut or eliminated were, in some cases, highly successful. And the good-governance programs were cut because the Egyptian government basically refused to work with the NGOs getting the money--in other words, the programs were not always that successful, and the human rights orgs that were getting money were especially not successful because the Egyptian government refused to work with them in the first place.

I'm also not sure you can imply the protesters would have been better organized had we continued funding the failed democracy programs--the government of Egypt, according to that audit of the programs you linked, even--"hindered implementers’ efforts to begin projects and activities through delays and cancellations."

You can't even state for a fact that it was a mistake to cut those programs, considering they didn't actually work that well. Here's another para from that audit: "Based on the programs reviewed, the impact of USAID/Egypt’s democracy and governance activities was limited in strengthening democracy and governance in Egypt. Furthermore, in separate recently published reports, independent nongovernmental organizations (NGOs) ranked Egypt unfavorably in indexes of media freedom, corruption, civil liberties, political rights, and democracy. Egypt’s ranking in these indexes remained unchanged or declined for the past 2 years. The overall impact of USAID/Egypt’s programs in democracy and governance was unnoticeable in indexes describing the country’s democratic environment."

Unnoticeable. If the increased funding led to unnoticeable impact, then how was it a mistake to junk the funding?

Posted by: dkp01 | February 10, 2011 11:00 AM | Report abuse

The primary fact about our relationship with Egypt is that it has not been a major factor in determining Egypt's political reality. The logic of the current Egyptian political leadership is rooted in Egypt not in Washington. The primary logic of our financial support for Egypt has been the peace agreement with Israel. That peace agreement was to everyone's advantage. Our money may help Mubarak some. But we did not bring him to power and our support is not what has been keeping him in power. It is a fact that Mubarak's methods of maintaining political power are not consistent with our values. But in relationship to other countries in the area, his methods don't stand out. There is little doubt that Iraq and Afghanistan were more pressing targets for our involvement than Egypt. Beyond those basic realities facts are hard to come by. Those expressed by the political powers in Washington are sure to be questionable. But, it is also hard to believe that a superficial fact checker has much better potential to evaluate Egypt's objective reality.

Posted by: dnjake | February 10, 2011 11:19 AM | Report abuse

Mubarak stole or earned legitimately his personal fortune, estimated in 75 billion? And worst: How much of this money has origin in the american aid during his rule?

Posted by: carlosumana | February 10, 2011 11:36 AM | Report abuse

angie12106: yes, Obama's first official budget was 2010, but the 2009 budget was unfinished when he became president and significant changes were made after he took office (the most important being the stimulus package). So the lines are very blurry as to what is Bush and what is Obama. In this case, changes were made to the democracy budget by the Obama team, which is why activists were upset.

to dpk01: thanks again for a thoughful comment. In this article, I did not want to get so much in the weeds regarding Bush's proposed transfer of funds from the ESF to other accounts, or about his effort to target whether certain countries really needed USAID funds for various programs--both controversial at the time, especially in Congress. But the bottom line is that Bush wanted to make a bet on promoting democracy in Egypt (at the expense perhaps of other USAID efforts) and Obama reversed that. We obviously will never know if it would have made a difference.

Posted by: glennkessler | February 10, 2011 12:09 PM | Report abuse


"But the bottom line is that Bush wanted to make a bet on promoting democracy in Egypt (at the expense perhaps of other USAID efforts) and Obama reversed that."

Fair enough. However, I think it could be argued that staying the course could have had a negative impact just as easily as it could have had a positive one. Based on the Wikileaks cables re. Egypt, it looks like the Egyptian government was actively aggravated by funding directed to human rights organizations and other pro-rights and pro-democracy NGOs they didn't like. Also in those cables, it's clear that the US government--under both Bush and Obama--were privately supporting Egyptian revolutionaries both behind Mubarak's back and in direct communication with Mubarak (asking him to free dissidents etc.).

So I'm not convinced that cutting money from failed programs, while continuing behind-the-scenes support for democratic activism, equals a lack of support or wishy-washiness on the issue. And I also disagree that the programs were "potentially promising," seeing as how they were in place for years and resulted in no actual change on the ground.

Here's a link to the Telegraph's rundown of those cables:

Posted by: dkp01 | February 10, 2011 12:46 PM | Report abuse

Is Hillary wearing a flesh-colored top under her jacket? That is one swooping neckline on her jacket!

Posted by: osmor | February 10, 2011 12:55 PM | Report abuse

Thank you Glenn Kessler, for reporting the truth.

Posted by: AnnsThought | February 10, 2011 12:56 PM | Report abuse

Did Mubarak only or Obama too fooled US?
Did only Mubarak fool his army and masses and the world audience or Obama too who was sure in his speech that Mubarak is leaving and the history is being made in Egypt. If like us all; Obama also felt that Mubarak has fooled every one in his speech, America must take some forceful measures to remove Mubarak form Egypt and handover him to the Hague Court for crimes against humanity charges. He has killed several opposition leaders and many Egyptians who have opposed his regime. This dictator should not make mockery of our prestige and reputation. Is some other powerful nation is behind him, who is giving him full support to stand-up to Obama?

Posted by: citysoilverizonnet | February 10, 2011 6:10 PM | Report abuse

Mr. Kessler-

I cannot square your story of a change in available funds between FY 2008 & 2009 with actual appropriations numbers.

The final appropriation for both years for "democracy, human rights and governance programs" was $20M, and the FY09 act was not passed until 2009.


Could it be that the severe cuts you report that Obama sought in early 2009 actually applied only to the remainder of 2009, which was almost half over when Obama was inaugurated? It would appear implausible that the budget could be cut be 70% -- as you suggested -- after the year was 50% over.

Did Obama administration efforts actually lead to a reduction in funds for FY 2009 relative to FY 2008? and if not, why does your piece allow readers to infer this?

Posted by: SteveL6 | February 13, 2011 12:04 AM | Report abuse


Thanks for the diligent research. Sometimes the language of these appropriations bills are not a very good guide for how money was actually spent. Please look at the links I provided, which are the OMB documents which show what actually happened. (The 2011 document, for instance, will show what was spent in 2009 and 2010.) Also, look at the link to the USAID website, which shows exactly how much money was spent for these programs in each year. This is a new web tool created by USAID in the last few months that will allow you to explore exactly what happened to US aid dollars for individual countries over the past five years. I also think the quotes I provided from the democracy activists on the Harvard blog demonstrate how upset people were at the changes being made by Obama.

Posted by: glennkessler | February 13, 2011 9:12 PM | Report abuse

Thanks much for the response, Glenn.

Could you please be more explicit?

Having gone through all of the links in this article (and reviewed the links in the previous Fact Checker articles linked here) I find nothing that appears to be an OMB document describing these changes in spending levels.

Posted by: SteveL6 | February 14, 2011 9:16 AM | Report abuse

The key paragraph is the one starting "The policy received little public notice..." Look at the link to the 2010 budget justification (starting on page 413) and the 2011 Budget justification (starting on page 464), as well as the link to the USAID aid navigator. The information is there.

Also, a key point of the article is not just the level of the aid but who received it. The Obama administration decided to no longer give assistance to civil society groups that had not been blessed by the Mubarak government. So not only was the level of funding cut, but it no longer went to people who were not beholden to Mubarak. That change in may ways was more important than the raw numbers.

Posted by: glennkessler | February 14, 2011 11:08 AM | Report abuse

Thanks for your patience, Glenn.

Yes, I understand the issue of restrictions on recipients, and agree that this is important.

Indeed, I suspect that the level of funding and the restrictions on recipients may not be independent, but causally related. That is, with a smaller pool of recipients, it is more difficult to disburse funds.

Posted by: SteveL6 | February 15, 2011 7:13 PM | Report abuse

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