ProPublica On U.S. Aid To Egypt: Where Does All Of The Money Go?

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This ProPublica article, written by Marian Wang and Theodoric Meyer, has been updated to reflect new developments. It was first published on Jan. 31, 2011.

Questions about the United States’ aid to Egypt have intensified in the wake of last month’s military coup. More than 1,000 Egyptians have been killed in the last week, most apparently supporters of ousted president Mohamed Morsi. A few members of Congress have called for cutting off aid to Egypt, which the White House says is under review.

We’ve taken a step back and tried to answer some basic questions about the aid, including how much the U.S. is giving Egypt, what’s changed in the years since the Arab Spring and what all the money buys.

How much does the U.S. spend on Egypt?

Egypt receives more U.S. aid than any country except for Israel, Afghanistan, Pakistan and Iraq.

The exact amount varies from year to year and there are many different funding streams, but U.S. foreign assistance to Egypt has averaged about $2 billion a year since 1979, when Egypt struck a peace treaty with Israel. Most of that goes toward military aid. President Obama’s 2014 budget tentatively includes $1.55 billion in aid, about the same amount the U.S. has sent in recent years.

Has any of the aid been cut off?

Actually, yes, but only economic aid, and only some of that. State Department has put a hold on some programs financed by the $250 million in annual economic aid to Egypt, including training programs in the U.S. for Egyptian hospital administrators, teachers and other government workers.

What about the military aid?

The administration delayed a scheduled delivery of four F-16 fighters to Egypt last month, and it is considering a similar delay for a shipment of Apache attack helicopters and repair kits for tanks. But the White House has not actually cut-off military aid, which has held steady at about $1.3 billion since 1987.  (Economic aid, meanwhile, has fallen by more than two-thirds since 1998.)

American officials say that military aid doesn’t just promote peace between Egypt and Israel, it also gives the U.S. benefits such as “expedited processing” for U.S. Navy warships when they pass through the Suez Canal. A 2009 U.S. embassy cable released by WikiLeaks makes essentially the same point:

President Mubarak and military leaders view our military assistance program as the cornerstone of our mil-mil relationship and consider the USD 1.3 billion in annual FMF as “untouchable compensation” for making and maintaining peace with Israel. The tangible benefits to our mil-mil relationship are clear: Egypt remains at peace with Israel, and the U.S. military enjoys priority access to the Suez Canal and Egyptian airspace.

According to the State Department, the military aid has included tanks, armored personnel carriers, antiaircraft missile batteries and surveillance aircraft in addition to the F-16 fighters and Apache attack helicopters. In the past, the Egyptian government has bought some of the weapons on credit.

How important is the aid to Egypt?

Pretty important. Saudi Arabia, which along with other Persian Gulf countries pledged $12 billion in aid to Egypt after the coup, promised this week to make up the difference in any aid cut by the U.S. or other Western nations. But much of the aid can’t easily be replaced, in particular fancy U.S. weapons and replacements parts for them.

Does the aid require Egypt to meet any specific conditions regarding human rights?

Not really. When an exiled Egyptian dissident called on the U.S. to attach conditions to aid to Egypt in 2008, Francis J. Ricciardone Jr., who had recently stepped down as the U.S. ambassador to Egypt, told the Washington Post the idea was “admirable but not realistic.” And then-Defense Secretary Robert Gates said in 2009 that military aid “should be without conditions” at a Cairo press conference.

Sen. Patrick Leahy, a Vermont Democrat, led Congress in adding language to a spending bill in 2011 to make aid to Egypt conditional on the secretary of state certifying that Egypt is supporting human rights and being a good neighbor. The language requires that Egypt abide by the 1979 peace treaty with Israel, support “the transition to civilian government including holding free and fair elections,” and put in place policies to protect freedom of expression, association, and religion, and due process of law.” It sounds pretty tough, but it’s not.

Has American aid to Egypt ever been cut off?

No. Congress threatened to block aid last year when Egypt began a crackdown on a number of American pro-democracy groups. A senior Obama administration official said that then-Secretary of State Hillary Rodham Clinton had no way to certify the conditions set out in the spending bill were being met.

But Clinton waived the certification requirement (yes, the secretary of state can do that) and approved the aid, despite concerns about Egypt’s human rights record. The reason? “A delay or cut in $1.3 billion in military aid to Egypt risked breaking existing contracts with American arms manufacturers that could have shut down production lines in the middle of President Obama’s re-election campaign,” the New York Times reported. Breaking the contracts could have left the Pentagon on the hook for $2 billion.

Doesn’t the U.S. have to cut off foreign aid after a coup?

The Foreign Assistance Act mandates that the U.S. cut aid to any country “whose duly elected head of government is deposed by military coup or decree.” But last month the White House decided that it was not legally required to decide whether Morsi, who was democratically elected last year, was the victim of a coup 2014 which allowed the aid to keep flowing. “We will not say it was a coup, we will not say it was not a coup, we will just not say,” an anonymous senior official told the New York Times.

As the Washington Post’s Max Fisher points out, Obama and his predecessors have dealt this kind of thing before. The president cut some aid to Honduras after a coup in 2009 and to Mali and the Central African Republic after coups there in 2012, but not all of it. And those countries aren’t nearly as important to U.S. foreign policy as Egypt. President Bill Clinton cut some aid to Pakistan after a coup there in 1999, but President George W. Bush reinstated all of it after the Sept. 11, 2001, attacks.

Obama’s refusal to call it a coup infuriated Morsi supporters. “What is a coup?” Wael Haddara, a senior adviser to Morsi, told the New York Times. “We’re going to get into some really Orwellian stuff here.”

What about economic aid and efforts to promote democracy?

The various economic aid efforts have had mixed results. The State Department has described the Commodity Import Program, which gave Egypt millions of dollars between 1986 and 2008 to import American goods, as “one of the largest and most popular USAID programs.” But an audit of the four-year, $57 million effort to create agricultural jobs and boost rural incomes in 2007 found that the program “has not increased the number of jobs as planned.” And an audit of a $151 million program to modernize Egypt’s real estate finance market in 2009 found that, while the market had improved since the program began, the growth was “not clearly measurable or attributable” to the aid efforts.

The U.S. has also funded programs to promote democracy and good government in Egypt 2014 again with few results. It has sent about $24 million a year between 1999 and 2009 to a variety of NGOs in the country. According to a 2009 inspector general’s audit, the efforts didn’t add much due to “a lack of support” from the Egyptian government, which “suspended the activities of many U.S. NGOs because Egyptian officials thought these organizations were too aggressive.”

recent audit of the European Union’s 20AC1 billion 2014 about $1.35 billion 2014aid program found that it had been “well-intentioned but ineffective” in promoting good governance and human rights. And a WikiLeaks cable revealed the Egyptian government had asked USAID in 2008 to stop financing NGOs that weren’t properly registered.

 

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  • Alan

    It serves to feather the nests of those in power at any given time. Where did you assume it went? Foreign aid to those who hate us is about as sensible a thing to do as buying ammo for your enemies guns.

    • Michael Papich

      All foreign aid is a mistake. Buying “friends” does NOT work!

      • Quester55

        M.P., If we were talking about NORMAL Friends, you’d be Correct, yet we’re talking about OBAMA & his MUSLIM BROTHERHOOD of Friends, All of Whom are about as Normal as An Muslim at a Brisk!!

  • Paul

    It appears the Obama administration is funding it’s own “crusade” against Muslims.

    • smilee

      Obama only has the money congress gives him and it comes with restritions on what he can spend it on.

      • Quester55

        Wait right there, While We call the men in White, They have a room waiting for you at, ” Sunny-dale Acres,”!
        Smilee, Where you here when OBAMA BY-PASSED Both houses & Gave Away his first 2 Trillion, The very First year as president?
        Obama acts like he & his party of Jackasses, are exempt from the Rules of Congress!!

        • podunk1

          5 years of no budget and they’re fixing to give him more. There are NO checks and balances on obama’s spending. It begins with defiant wasteful spending!

          Anyone who has started a lemon-aid stand, operated a successful business,or managed the complexities of a major corporation knows running the USA is a 24-7 never ending job. Obama is either sleeping, playing, or getting ready for vacation or another staged campaign tour where anybody with a brain is not allowed in.

          WE NEED TO PURGE government of progressives & RINOS – begin by making them accountable and VERY UNCOMFORTABLE – like a thieves & prostitutes doing their thing in the first pew of of an Iranian Mosque!

      • merle

        He abuses his executive power quite often . It should be taken away.

    • Quester55

      Look Again, Not all MUSLIMS LIVE in EGYPT!

      like a Cheese Factory, If you Eliminate 1 Rat, don’t Rejoice, There are Millions more waiting for their chance ate getting the Cheese!
      —————————————————————————————
      PAUL, Don’t be Suckered by the, ” OBAMA Administration,” into believing in their well written, PROPAGANDA Reports, That Lie of a ” Crusade Against Muslims, is just another ” Misdirection Ploy “, to lull the unsuspecting Sheep, into the slaughter Pens!

  • NavyFlyer1325

    Leave the Egyptian Military to its cleansing of its nest of Muslim Brotherhood vipers and Morsi supporters. The Brotherhood stole the election resulting from the ousting of Mubarak. Everyday Egyptians didn’t much care for the Sharia Law and other political and personal ramifications of Morsi’s planned Radical Muslim takeover, either. This is a true Citizen uprising, to get a government that they deserve, and to reject dictatorship of either the Left or the Right. We must stand with the Egyptian People!

    • jack

      Right on MR navyflyer

  • Walt wenger

    First question – “U.S. foreign assistance to Egypt has averaged about $2 billion a year since 1979,” , “But the White House has not actually cut-off military aid, which has held steady at about $1.3 billion since 1987. (Economic aid, meanwhile, has fallen by more than two-thirds since 1998.)” , ” President Obama’s 2014 budget tentatively includes $1.55 billion in aid, about the same amount the U.S. has sent in recent years.”

    So, how much are we sending them each year?

    Second question – ” The reason? “A delay or cut in $1.3 billion in military aid to Egypt risked breaking existing contracts with American arms manufacturers that could have shut down production lines in the middle of President Obama’s re-election campaign,” the New York Times reported.” – so the reason was to not threaten a re-election campaign? I object!

    Third question – “No. Congress threatened to block aid last year when Egypt began a crackdown on a number of American pro-democracy groups. A senior Obama administration official said that then-Secretary of State Hillary Rodham Clinton had no way to certify the conditions set out in the spending bill were being met.

    But Clinton waived the certification requirement (yes, the secretary of state can do that) and approved the aid, despite concerns about Egypt’s human rights record.” – so the Secretary of State has the power to override congress and to do so by fiat? Then why bother having a Congress?

    • Quester55

      Heck, lets just Cut out the Middle man & Declare our Country a DICTATORSHIP & Have Done with it, Is that what your saying,” Walt W.”??

      • Walt wenger

        Quester55 — What I am asking is what is the dollar amount we are talking about? Every time they quote an amount, it is different.

        Also, if the Secretary of State can override Congress whenever they want, then at least Congress is a total waste and useless. If that implies we should accept that we are a dictatorship, so be it. I would rather that appropriate actions were taken to make Congress a functional part of our government again, but if no one does this, then by default we have become a dictatorship. This is NOT because I want it to be so, it is simply fact.

  • Warrior

    Hmmm, seems like a lot of folks are in on American “Stimulus” or call it “Bribes” if you wish! Well, anyway, when you finally understand gubmint “jobs” programs you’ll finally understand a piece of the puzzle.

  • pete

    Get real everybody. Without the manufacture of arms and ammunition and the sales thereof, there is no future for the world. Those are the most essential manufacturing sectors relevant to growth. Without that industry, all growth will end. The war machine has to go on and on and on and on……..there is no such thing as democracy or humanitarian aid in this equation. Greed rules. Amen.

  • Quester55

    Depending who is reading off these ” Facts & Figures”, The question of,” Where does the Money Go?”, remains evasive!
    How is it that This Country(The Divided Stats of America) is so Broke that we need to Go to our (Enemies) to Barrow Funds, Just to turn around & take that Loan & GIVE THE WHOLE THING AWAY to a Country that Actively HATES our GUTS??
    EGYPT, if they had the power, Would Bury us all in a Heartbeat! Yet our MUSLIM/Communist President, Continues Digging our Debt Hole Deeper in supporting EGYPT???

  • laura merrone

    We should cut of aid to all these countries and let them solve their own problems. We are going broke giving and giving out of our own deficits…

  • 1baronrichsnot1

    2 billion per year since 1979, 66 billion to wahabi sunnis, the brother hood? Makes about as much sense as donations to the spca to maintain mad dogs in luxury. These folks are dangerous. Hate america first, then isreal, the pact doesn’t mean anything,they are using the money to attack isreal in any way they can.

  • beagledan

    We seem to have it backwards. The ousted government was not because of a so-called coup because the people had a referendum to get rid of the two faced liar and dictator that had been elected. (We could learn from them) That’s not a coup since the military did what the people asked them to do. It was not instigated by some military strong man. The aid is no longer going to the brotherhood that we have stupidly supported before, … the ones that tried to enforce sharia law on the people, the ones we know as Al Qaeda…. the ones behind all the trouble associated withe the Arab Spring. All our recent screw ups in the Middle East is because the USA supported the wrong side just as we are trying to do in Syria. As far as Egypt is concerned, we are doing something right for a change, and have a chance to undo the harm done by Barak Obama and Hillary Clinton… who have supported the brotherhood from the very beginning.

    • crossrammed302

      I’ve been wondering about that. The military was backing the people’s will to enforce their form of a constitution. It would the same as if the US military back the people in re-enforcing the laws of the US Constitution if, when, we finally eradicate the mafia we currently have messing up our country. Therefore, keeping up aid and peace treaties which are in place to our advantage, would be a good idea. No wonder Obama is considering stopping it now that the Muslim brotherhood is no longer in control of the funding. God forbid the people be in charge of their own government….
      However, from an economic viewpoint, the military industrial complex is a disgraceful monster that feeds on its self at our expense.