CAIRO — Egypt’s military-led government said Sunday that it would put 19 Americans and two dozen others on trial in a politically charged criminal investigation into the foreign financing of nonprofit groups that has shaken the 30-year alliance between the United States and Egypt.
The decision raises tensions between the two allies to a new peak at a decisive moment in Egypt’s political transition after the ouster of President Hosni Mubarak a year ago. Angry protesters are battling security forces in the streets of the capital and other major cities. The economy is in urgent need of billions of dollars in foreign aid. And the military rulers are in the final stages of negotiations with the Islamists who dominate the new Parliament over the terms of a transfer of power that could set the country’s course for decades.
The criminal prosecution is a rebuke to Washington in the face of increasingly stern warnings to Egypt’s ruling generals from President Obama, cabinet officials and senior Congressional leaders that it could jeopardize $1.55 billion in expected American aid this year, including $1.3 billion for the military. But for Washington, revoking the aid would risk severing the tie that for three decades has bound the United States, Egypt and Israel in an uneasy alliance that is the cornerstone of the American-backed regional order.
Secretary of State Hillary Rodham Clinton said she had personally warned the Egyptian foreign minister, Mohammed Amr, at a security conference in Munich on Saturday that the continuing investigation of the nonprofit groups cast new doubt on the aid. “We are very clear that there are problems that arise from this situation that can impact all the rest of our relationship with Egypt,” she told reporters there.
Mr. Obama delivered a similar warning to Egypt’s acting chief executive, Field Marshal Mohamed Hussein Tantawi, less than two weeks ago. Last week, 40 members of Congress signed letters to Field Marshal Tantawi making the same threat. “The days of blank checks are over,” Senator Patrick J. Leahy of Vermont, the Democrat who chairs the spending panel overseeing the aid, said in a speech from the Senate floor on Friday.
Congress recently required the State Department to certify that Egypt is making progress toward democracy before aid can be disbursed. Lawmakers and administration officials say the crackdown on the civil society groups could violate the criteria set out in the law.
The prosecution could hardly have been better designed to provoke an American backlash. Although the charges against the 19 Americans are part of a broader crackdown on as many as nine nonprofit groups here, its most prominent targets are two American-financed groups with close ties to the Congressional leadership, the National Democratic Institute and the International Republican Institute. Both are chartered to promote democracy abroad with nonpartisan training and election monitoring.
The Americans facing criminal charges include Sam LaHood, director of the Republican Institute’s Egypt operations. He is the son of Ray LaHood, the secretary of transportation and a former Republican congressman from Illinois.
Egyptian Foreign Ministry officials have said the prosecution is a judicial matter outside their control. But the government, including the prosecutors, is under the direct authority of the military council. The investigation has also been accompanied by an escalating drumbeat of anti-American statements from Egypt’s government suggesting that Washington has been handing out cash to stir unrest in the streets. Some state news media, citing unnamed sources, have reported that one of the foreign-financed organizations paid illiterate laborers to join protests.
So far, the warnings from Washington appear to have only redoubled the determination of Egyptian authorities. At a news conference here on Sunday, Faiza Abu el-Naga, who oversees foreign aid, declared that the government “will not be pulling the plug” on the case, the state newspaper Al Ahram reported on its Web site.
“The government will not hesitate to expose foreign schemes that threaten the stability of the homeland,” she said.
Western diplomats have often observed that previous Egyptian governments facing public doubts at home have found it expedient to rally support by stoking feuds with Washington, which, despite its financial largess, is deeply resented here because of its support for Israel and its invasion of Iraq.
But many human rights advocates here say some members of the council may believe their contention that “foreign hands” are stirring up trouble. Speaking on the condition of anonymity, a former general close to the military council insisted that Washington was illegally financing youth activists in an attempt to destabilize Egypt and thus keep it dependent.
Reports of the charges first appeared Sunday in state news media outlets. Representatives of the Justice Ministry could not be reached for comment.
A lawyer representing the Republican Institute and other groups under investigation said he had not received official notification. “I don’t know what’s going on,” said the lawyer, Negad el-Boraei. “Is it a psychological battle of some kind directed against the Americans?”
In Washington, a State Department spokesman said the United States was “deeply concerned” by reports of the charges and was “seeking clarification from the government of Egypt.”
Two other American groups backed in part by American government money, Freedom House and a journalism institute, are also part of the investigation, along with a German group and at least four Egyptian organizations that rely on foreign financing.
Of the 43 people facing charges, 19 are American, 16 are Egyptian, and 8 are of other nationalities, a Justice Ministry official said Sunday.
They have been charged with violating legal restrictions on nonprofit groups left over from Mr. Mubarak’s government that in effect kept virtually every independent civil society organization here in a kind of legal twilight subject to raids and arrests at any time.
The laws required licenses that were almost never granted, effectively precluded domestic financing and exerted government control over foreign contributions.
Neither the National Democratic Institute nor the International Republican Institute was licensed. But last fall, both were formally invited here as official observers of the parliamentary elections.
In December, prosecutors raided the offices of as many as nine nonprofit groups, including the four American organizations, confiscating money, computers and files and shutting down their operations. In January, the authorities imposed a travel ban on at least six Americans, including Mr. LaHood, and several Europeans.
Last week, the State Department acknowledged that its embassy in Cairo had given shelter to at least three Americans caught by the travel ban and fearing arrest.
On Sunday, the Egyptian authorities extended the travel ban to all 43 people facing charges, The Associated Press reported. But by the end of Sunday, there were still no reports of arrests.
Mayy El Sheikh contributed reporting from Cairo, and Steven Lee Myers and Scott Shane from Washington.
This story, "Egypt Defies US by Setting Trial for 19 Americans on Criminal Charges," originally appeared at The New York Times.