Economic recovery is sluggish in Egypt Reuters

Unfazed by the U.S.' threat to cut aid, Egypt determined to continue its investigation into foreign non-governmental organizations (NGOs) and pro-democracy groups.

A total of 43 NGO employees, including 19 Americans, face trial for illegally funding activists in Egypt. Washington is calling the affair a witch hunt and some members of U.S. Congress feel that cutting aid will be the only way to force Egpyt to lift a travel ban on the American citizens.

Egypt will apply the law ... in the case of NGOs and will not back down because of aid or other reasons, said Prime Minister Kamal al-Ganzouri, who was recently appointed by the ruling Supreme Council of the Armed Forces (SCAF).

Egypt is the second-largest recipient of U.S. military aid and fourth largest recipient of total U.S. aid after Pakistan, Israel and Afghanistan, respectively. Each year, Egypt receives about $1.75 billion in aid, nearly $1.3 billion of which is related to its military.

Some of that funding is channeled through American NGOs working in Egypt. After the fall of former president, Hosni Mubarak, Washington sent nearly $70 million in additional funds to these organizations to help with forming a new government and rebuilding Egypt's all-but-collapsed economy.

But Egypt's interim government is now claiming the ways the NGOs spent that money was never approved. The NGOs received the official OK under Mubarak, but never renewed their bids after the SCAF took control.

Now, the U.S. is threatening to cut off some of its future aid and funding if the NGO employees are not allowed to return home.

The absence of a quick and satisfactory resolution to this issue will make it increasingly difficult for congressional supporters of a strong U.S.-Egypt bilateral relationship to defend current levels of assistance to Egypt, especially in this climate of budget cuts in Washington, members of Congress said in an official letter.

Joe Stork, deputy Middle East director at Human Rights Watch, claimed “the Egyptian authorities are using a discredited Mubarak-era law to prosecute non-governmental groups while proposing even more restrictive legislation. A similar claim has been echoed by Egyptian citizens since the SCAF took control, and they fear that the a new repressive regime has replaced the old.

Stork's statement was correct on at least one level. The minister behind the NGO crackdown is Faiza Abou el-Naga, a leftover from the Mubarak government who is up to her old tricks.

Mubarak is still ruling in some ways and is still blocking the emergence of a new regime in Egypt, Abdullah al-Ashaal, a former deputy foreign minister, told the Washington Post. Faiza Abou el-Naga is one of the tools in that.

Abou el-Naga has controlled aid spending for decades and made powerful allies among Egypt's top generals, and, like the military, is distrusting of foreign influences on Egypt's nascent democracy.