Graham holds up Egypt funding

WASHINGTON - President Barack Obama’s first package of post-coup economic aid to Egypt is hitting a roadblock in Congress, where a key Republican senator is holding up the transfer of $60 million to a program to spur private investment in Egypt’s struggling economy, according to U.S. officials and congressional aides.

The Obama administration decided earlier this month to suspend much of America’s annual $1.6 billion in mostly military support to its once-ironclad Middle East ally, citing the ruling army’s continued crackdown on political opponents since ousting Mohammed Morsi, the popularly elected, Muslim Brotherhood-backed president, in July. But the administration pledged at the same time to maintain the strategic relationship, and recently sought congressional approval for assistance.

Standing in the way is South Carolina Sen. Lindsey Graham, the top Republican on the Senate Appropriations subcommittee that oversees foreign assistance.

The money would go to support the Egyptian-American Enterprise Fund, which was established during the height of the Arab Spring when Egyptian protesters toppled longtime leader Hosni Mubarak in 2011. Instead of traditional government-to-government aid, the fund offers low-cost capital to investors to spur private-sector growth and more competitive markets in an Egyptian economy rocked by a tourism crash and a sharp decline in foreign investment over the last two and a half years.

But even money with ostensibly capitalist aims is running into problems with U.S. lawmakers, many of whom have criticized the Obama administration for not halting all aid to Egypt since the military takeover as demanded by a U.S. coup law, and for lacking a clear strategy to stabilize the Arab world’s most populous country.

“Senator Graham has placed a hold on these funds and until he sees Egypt moving toward democracy, he will continue to restrict funding,” Kevin Bishop, a spokesman for the senator, said in a statement. “Additionally he believes American taxpayers deserve a much clearer explanation of what exactly is President Obama’s policy toward Egypt.”

In a further sign of lawmakers’ displeasure with Egypt, three Republican senators sent a letter to Secretary of State John Kerry on Tuesday, pressing him to speak out against the violence in Egypt and emphasize the need for the interim government to protect minorities and Coptic Christians.

The senators - Bob Corker and Lamar Alexander of Tennessee, and Roy Blunt of Missouri - cited recent reports of targeted attacks on Coptic churches and other individuals.