In  the more than 30 years since the signing of the treaty, Egypt has been a  key strategic partner of the United States in the Middle East. Prosecution of NGOs in Egypt

The Egyptian government strongly objected to some of the U.S.  government’s planned assistance for democracy and governance after  the January 2011 revolution, including the award of funding to  unregistered NGOs. Also consistent with their agencies’  policies and internal control standards, State and USAID have taken  some steps as far back as 2005 to plan for managing the risks of  providing democratic and governance assistance, but they have not taken  steps to incorporate lessons learned from the events leading up to and  including the prosecution of U.S.-funded NGOs in Egypt into their risk  management plans. According to U.S.  government and NGO officials, the Egyptian government provided  conflicting information regarding the legal status of some NGOs receiving  U.S. funds. The U.S. Government Provided the NGOs Prosecuted in Egypt with Diplomatic, Legal, Financial, and Grant Flexibility Support

From the time after the December 2011 raids through the conviction of  the NGO workers in June 2013, the U.S. government took a number of  actions to support the four U.S. NGOs prosecuted in Egypt—Freedom  House, ICFJ, IRI, and NDI. The U.S. Government Provided Diplomatic Support to the Prosecuted U.S. NGOs

The U.S. government undertook a range of diplomatic to defend the  employees of the four U.S. NGOs. The U.S. government also met regularly with officials from the four U.S.  NGOs to help them devise strategies for dealing with the Egyptian  government. The U.S. Government Provided Financial Support to the Prosecuted U.S. NGOs

The U.S. government provided financial support to the four U.S. NGOs by  allowing them to use funding from their grants to pay for legal fees, court  costs, fines, and other associated costs related to their trial. Specifically, the four organizations that  were prosecuted by the Egyptian government are no longer conducting  activities inside Egypt. The NGO trial exacerbated existing challenges for  some of the other NGOs implementing U.S. democracy and governance  programs. The Amount of Funding and Number of Grants Awarded for Democracy and Governance Projects in Egypt Decreased after the NGO Trial

Since the beginning of the NGO trial in 2012, the number and total dollar  value of grants awarded for democracy and governance activities in  Egypt has decreased. Recommendation for Executive Action

To help ensure that State and USAID are better positioned to respond to  unintended or adverse consequences related to their future democracy  and governance assistance in Egypt and other countries, we recommend  that the Secretary of State and the USAID Administrator take steps to  identify lessons learned from their experiences in Egypt and work to  incorporate these lessons into plans for managing risks to their future  democracy and governance assistance efforts. Appendix I: Scope and Methodology

The objectives of this review were to examine (1) the extent to which the  U.S. government identified and managed potential risks of providing U.S.  democracy and governance assistance in Egypt; (2) what support, if any,  the U.S. government provided to the nongovernmental organizations  (NGO) prosecuted by the Egyptian government; and (3) the extent to  which U.S. democracy and governance assistance in Egypt has been  affected, if at all, by the prosecution of NGO workers. To examine the extent to which the U.S. government identified the  potential risks of providing U.S. democracy and governance assistance in  Egypt, we reviewed memos approving democracy and governance  assistance for Egypt, letters between the U.S. and Egyptian governments  discussing the provision of democracy and governance assistance, State  cables describing Egyptian government concerns with U.S. assistance,  and implementing assistance agreements between the United States and  Egypt regarding democracy and governance assistance. We interviewed  State and U.S. officials who manage or coordinate democracy and  governance assistance for Egypt in Washington, D.C., and Cairo, Egypt.
Why GAO Did This Study

For over 30 years, Egypt has been a key strategic partner of the United States and the recipient of billions of dollars of U.S. assistance. Starting with its revolution in January 2011, Egypt has undergone a series of political transitions. Shortly after the revolution, the U.S. government allocated $65 million in assistance for a range of activities to support Egypt's progress toward democracy. However, the Egyptian government objected to the U.S. government providing this assistance directly to NGOs, including to some that it viewed not to be registered under Egyptian law. In June 2013, the Egyptian government convicted employees of four U.S. NGOs.
This report examines (1) the extent to which the U.S. government identified and managed potential risks of providing U.S. democracy and governance assistance in Egypt; (2) what support, if any, the U.S. government provided to the NGOs prosecuted by the Egyptian government; and (3) the extent to which U.S. democracy and governance assistance in Egypt has been affected, if at all, by the prosecution of NGO workers. GAO analyzed U.S. government and NGO documents and interviewed U.S., Egyptian, and NGO officials in Washington, D.C., and Egypt.

What GAO Found

The U.S. government identified potential risks in providing democracy and governance assistance in Egypt, including the Egyptian government's likely objection to the U.S. plan to use $65 million to directly fund nongovernmental organizations (NGO) in 2011. The Egyptian government had repeatedly raised objections to such direct funding since the U.S. Agency for International Development (USAID) began it in 2005. USAID and Department of State (State) guidance calls for the development of risk management plans for their programs. State and USAID have taken some steps to manage the risks of providing democracy and governance assistance in Egypt, including the issuance of an April 2013 cable that provided guidance on how to counter increasing risks to NGOs globally. However, State and USAID have not documented lessons learned from the U.S. experience in Egypt or used these lessons to inform their risk management plans for future democracy and governance assistance.
The U.S. government provided the four prosecuted U.S. NGOs with diplomatic, legal, financial, and grant flexibility support. The U.S. government's diplomatic efforts included holding multiple meetings with Egyptian officials to try to defend the NGO employees. U.S. legal support to the NGOs included working with the NGOs' lawyers to develop legal strategies for the case. U.S. financial support allowed the four U.S. NGOs to use a total of $4.9 million in funding from their grants to pay for various legal costs related to the trial. Finally, the U.S. government allowed the four NGOs to modify their grants to adjust their planned activities and time frames as a result of the trial.
The Egyptian government's trial of the four U.S. NGOs significantly affected U.S. democracy and governance assistance in Egypt. The four prosecuted U.S. NGOs are no longer conducting activities inside Egypt and modified or stopped a number of their programs. Other NGOs implementing U.S. democracy and governance programs reported experiencing delays in obtaining Egyptian government approval to receive U.S. funds. Since the start of the trial, in 2012, the amount of funding and number of grants awarded for democracy and governance projects in Egypt decreased (see fig.) and some activities are now more challenging for the U.S. government to implement.

What GAO Recommends

GAO recommends that State and USAID incorporate lessons learned from their experience in Egypt into risk management plans for future democracy and governance assistance efforts. State and USAID concurred with the recommendation.