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The year 2011 brought many surprises in the Middle East and North Africa, but none greater than the near-upending of the longstanding U.S.-Egyptian security alliance by the seemingly minor issue of foreign funding for civil society.1 In July 2011, five months after President Hosni Mubarak's fall, Egypt's Justice Ministry began investigating the activities and funding of numerous nongovernmental organizations (NGOs), including several that received support from the United States. In December, Egyptian police raided a number of NGO offices, seized materials, and arrested 43 civil society workers (including 16 U.S. citizens) on charges of operating without a license, receiving unauthorized foreign funds, and engaging in political activity. Making an issue of outside aid to Egyptian civil society was not new. Mubarak had done it. Indeed, the official driving the probe was a Mubarak-era holdover who repackaged the fallen dictator's complaints about foreign money coming into Egypt to "promote American and Israeli interests."
From one angle, Egypt's decision to target foreign-supported NGOs made a certain sense. Egyptian democracy and human-rights advocates, active in the protests that had toppled Mubarak, had since become vocal critics of the Supreme Council of the Armed Forces (SCAF) and its handling of the post-Mubarak transition. But in other ways, the government's response was puzzling. The targeted groups were weak and of scant consequence compared to the Muslim Brotherhood and the Salafist parties that were set to dominate the parliamentary elections. Moreover, the sums in question were small: Out of just over $1.5 billion a year in overall U.S. aid to Egypt, less than $60 million was going to civil society. Most remarkably, the military rulers in Cairo were heightening tensions with Washington at an especially sensitive time, just when the SCAF needed continued U.S. support in the face of mounting protests. The NGO crackdown triggered an unprecedented response from the U.S. Congress, which delayed and threatened to withhold $1.3 billion in military assistance.
Egypt is not alone in taking aggressive action to curtail the activities of foreign-funded NGOs. In July 2012, Russia adopted a law requiring that politically active NGOs receiving foreign funding submit quarterly reports and register with the Justice Ministry as "foreign agents"-a term synonymous with spy in the Russian language. In September came the ejection of the U.S....