Egyptian Court Verdict Stokes U.S. Tensions
The Wall Street Journal: Asia
Matt Bradley

CAIRO — An Egyptian court convicted 43 nongovernmental-organization employees, including at least 16 Americans, of using unregistered foreign funding, worrying some Egyptian groups who fear the precedent could hinder their own efforts.

While many of the convicted foreigners have left the country, the ruling on Tuesday could put one American and one German in jail, and required the closure of the Egypt offices of five NGOs, including four based in the U.S.

The charges originated when Egypt’s former military-controlled government accused the groups of using U.S. money to foment violence against its rule in late 2011, after the toppling of longtime leader Hosni Mubarak and before the election of a new government.

The case damaged relations between the U.S. and Egypt after U.S. lawmakers threatened to block the flow of $1.3 billion in annual American military aid.

Tuesday’s verdict reignited U.S. concerns. Secretary of State John Kerry called the trial politically motivated, in a statement on Tuesday. “This decision runs contrary to the universal principle of freedom of association and is incompatible with the transition to democracy,” he said.

Judge Makram Awad sentenced 27 foreign NGO employees—all of whom were tried in absentia—to five years in prison for illegally receiving foreign funds and establishing nongovernmental organizations without a license. He sentenced five employees, including Robert Becker, an American who remained in Egypt for the trial, to two years in prison, and gave one-year suspended sentences to 11 defendants. All those convicted were fined 1,000 Egyptian pounds, or about $143.

“It is very surprising. It’s very cruel,” said Sarwat Abdel Shaheed, a lawyer who represented employees for U.S.-based groups the National Democratic Institute, which was Mr. Becker’s employer, and the International Center for Journalists. “This will have a very bad impact on civil society in general.”

The other organizations included the U.S.-based advocacy organization Freedom House; the NDI’s Republican-backed sibling, the International Republican Institute; and Germany’s Konrad Adenauer Foundation. The rest of the over one dozen NGOs involved in the case were Egypt-based organizations that rely at least partly on foreign funding.

NGO workers and their attorneys said they feared Tuesday’s ruling would lend support to the passage of a law now under consideration that would make it easier for the government to rein in human-rights groups, educational institutions and pro-democracy organizations.

The law would require that all foreign funding for NGOs be approved by a committee made up in part of government representatives, and allow for increased government scrutiny of their operations.

“The NGO law, if anything, confirms the view of the NGOs that we’ve had in this trial,” said Heba Morayef, the Egypt director for the New York-based Human Rights Watch. “It views NGOs operating in Egypt as potential foreign agents.”

Muslim Brotherhood-backed President Mohammed Morsi submitted the draft NGO law last week to Egypt’s interim legislature, which is dominated by the Brotherhood’s Freedom and Justice Party. The head of the party’s legal committee, Mokhtar al-Ashry, said the law intends to “liberate” NGOs by streamlining the process for setting up projects and limiting the government’s ability to monitor and dissolve organizations.

The U.S. National Security Council, in a statement Tuesday, said the court’s decision “calls into question the Government of Egypt’s commitments to support the important role of civil society.” The statement urged Egypt’s government to ensure the draft law “conforms with international standards.”

While the proposed law contains added protections for local NGOs, it would block foreign groups that “violate national sovereignty”—vague language that could be employed against foreign pro-democracy organizations, said a Human Rights Watch complaint.

Wael Haddara, an adviser to Egypt’s Brotherhood-backed presidency, said the law would mark an improvement by giving Egypt’s judiciary, not its presidency, discretion over NGOs. “Under the draft law, this situation would not have arisen,” he said of the NGO trial. Mr. Haddara said the presidency didn’t have an official comment on Tuesday’s verdict.

In defending the draft NGO law, Mr. Haddara said that nearly half the members of the foreign-funding “coordinating committee” would come from Egyptian civil society. Since most of the decisions regarding financing would be taken by courts, the draft law would protect Egyptian NGOs from the political whims of the executive, which wields near-complete power over NGOs under existing laws, he said.

Among the American defendants given the harshest sentence was Sam LaHood, the son of U.S. Secretary of Transportation Ray LaHood.

Sam LaHood, who led the Cairo office of the International Republican Institute, left the country with at least five other American defendants in March 2012 after a judge lifted a court-ordered travel ban and the U.S. government ultimately paid about $330,000 in bail for each.

The foreign NGO workers’ exodus in early 2012 left only two foreigners to face trial in Egypt.

Mr. Becker, the only remaining American, declined requests for comment on Tuesday. A message on his Twitter account said he was “maintaining my innocence on charges of starting NGO six years before I actually arrived in Egypt & waiting for appeal strategy.”

Mr. Becker had previously told reporters that he chose to stay in Egypt out of solidarity with his Egyptian colleagues. He appeared in the defendants’ cage throughout the trial, though he wasn’t present on Tuesday when Judge Awad sentenced him to two years in jail.

Mr. Shaheed, the NGO attorney, said he had expected the judge to eventually acquit all 43 NGO workers because of the politicized nature of the case. He said he and other attorneys representing the NGO workers would appeal the decision.

He said he believed the judges may have been seeking to mollify public opinion long steeped in anti-American sentiment and tales of foreign intrigue and spycraft.

“The judges thought that by this kind of judgment they would please the public opinion—giving the rude Americans who left the country five years’ imprisonment,” said Mr. Shaheed. “They will think they will make themselves heroes.”

Egypt started investigating the mostly Western-based NGOs in late 2011 after the country’s minister of planning and international cooperation, Fayza Abul Naga, publicly accused U.S. and Western-based NGOs of financing dissent against the then-ruling council of military generals.

Activists said the investigation and subsequent charges amounted to what they termed a cynical attempt to blame foreign powers for the chaos that has continued to reign in Egypt, following the February 2011 ouster of Mr. Mubarak.

The accusations were particularly confusing since the U.S. government has supported the Egyptian military with funding since the 1980s.

Nevertheless, the case appeared to take on a life of its own. In the more than a year that has passed since the investigation began, the generals and Ms. Naga have largely left the public stage. Two prosecuting lawyers reached on Tuesday said they had left the case months ago. They declined to explain why.

The court didn’t publish an explanation of its rulings on Tuesday.

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