Egypt-US relations appear set to see a downturn after Egypt’s decision to refer 43 civil society workers to court on charges of violating laws regulating the operation of non-governmental organisations (NGOs) in Egypt. Those facing charges include US, European and Egyptian nationals, among others, working for a handful of foreign and national NGOs with local operations.

The decision came only a few days after Cairo and Washington had already sparred following a decision by Egyptian investigators to prevent four US citizens from leaving Egypt pending investigations. Head of the Egyptian office of the US-based International Republican Institute – and son of US Transportation Secretary Ray LaHood – was amongst those slapped with a travel ban.

“We really have no choice but to follow through with the legal process; we know that this would bring about a cut in US aid to Egypt, but we cannot do otherwise,” said one concerned Egyptian official.

The case is part of a wider controversy that has been brewing since military and judicial authorities raided a number of NGO offices in late December. Targeted NGOs included US, European and Egyptian organisations.

The decision to refer the 43 to trial was issued despite a blunt warning from US Secretary of State Hillary Clinton to her Egyptian counterpart Mohamed Kamel Amr at a meeting on the sidelines of a recent security conference in Munich. Like other American officials who had met with an Egyptian military delegation in Washington in recent days, Clinton demanded in her meeting with Amr that the US nationals in question be allowed to depart the country immediately and that charges against them be dropped.

“Amr made it clear to the US secretary of state that the matter was in the hands of the judiciary and that there was no room for any intervention in the matter,” according to a press statement issued by foreign affairs ministry spokesman Amr Roshdy.

According to evidence collected during almost two weeks of investigations, the 43 suspects stand accused of breaking Law 84 of 2002, which strictly proscribes donations to national or foreign NGOs operating in Egypt except by permission of relevant Egyptian authorities.

Initiatives aimed at reaching an out-of-court settlement have failed. According to Roshdy, these initiatives were “suffocated by the direct and repeated threats made in Washington to cut military aid to Egypt to retaliate against the investigation of American individuals.”

Meanwhile, Minister of International Cooperation Fayza Abul-Naga said on Sunday following the decision to refer the 43 suspects to court that Egypt “has not and will not close the file on violations committed by NGOs.”

Sources close to the investigation told Ahram Online that the volume of evidence compiled was too significant to overlook, and that some evidence pointed to attempts by the NGOs to interfere in Egypt’s internal affairs.

“One of the things that were found was a record of talks between some of the concerned NGOs with foreign bodies, political and otherwise, about the operation of the transitional phase in Egypt," said one informed source.

Among the most controversial NGOs in the case are two organisations affiliated to the Republic and Democratic parties in the US, which had been operating in Egypt without a license – but with the tacit approval of the toppled Mubarak regime – since 2005.

“These organisations did not cross the line and Muburak agreed to let them operate because he wanted to portray himself to Washington as a liberal and moderate president. Things have changed since the revolution," said another Egyptian official.

The decision to refer the concerned NGOs to trial means that the four US nationals, who had taken refuge in the US embassy in Cairo, would have to present themselves in court when summoned.

According to Egyptian officials, the Egyptian embassy in Washington has been instructed to inform the US administration that Egypt’s executive authority – currently manifested in the ruling Supreme Council of the Armed Forces – cannot overturn decisions made by the judiciary.

“Americans cannot preach to us night and day about the need to abide by the rule of law and then ask us to break the law to serve their interests,” said one official.

Another Egyptian official said that out-of-court settlements could “theoretically be reached within a legal framework,” but that the issue had now gone beyond that stage.

US military aid to Egypt has been frozen since December of last year, pending certification from the US administration that Egypt’s new government is committed to peace with Israel, democracy and freedom of speech. The US administration has not yet presented this certification to the US Congress.

This is not the first time for the US Congress to suspend a portion of the annual $1.3 billion in military aid to Egypt over matters related to human rights. A suspension was ordered in 2007 by the Republican George W. Bush administration, but the US Secretary of State at the time waived the suspension.

Egypt has received military and economic assistance from the US – with the former dwarfing the latter – ever since it signed the Camp David peace treaty with Israel in 1979.

A proposal put forward by Egypt to revamp the terms of the economic assistance, tabled before last year’s revolution, was shrugged off by Washington.

Meanwhile, European sources in Cairo told Ahram Online that the recent referral of some civil society activists to court had led some NGOs to consider suspending their Egypt operations pending the amendment of laws regulating the activities of NGOs in the country.