By Andrew Quinn
WASHINGTON (Reuters) - The Obama administration on Friday formally released $1.3 billion in military aid for Egypt despite Cairo's failure to meet pro-democracy goals, saying U.S. national security required continued military assistance.
U.S. Secretary of State Hillary Clinton waived congressional conditions imposed late last year that tied U.S. aid to progress in Egypt's transition to democracy following the ouster of longtime President Hosni Mubarak.
"These decisions reflect America's over-arching goal: to maintain our strategic partnership with an Egypt made stronger and more stable by a successful transition to democracy," State Department spokeswoman Victoria Nuland said in a statement.
Clinton's decision, which has been criticized by some U.S. lawmakers, took note of Egypt's progress since last year's street revolution, including holding parliamentary elections and preparing for a presidential election in May.
But a crackdown on pro-democracy forces - including some U.S. groups - over the last several months infuriated lawmakers in Washington and caused the Obama administration to warn Egypt that its aid might be in peril.
Political analysts said the U.S. move showed that Washington still hopes to maintain its influence with Cairo, although they said these hopes may be misaligned with the political transition occurring in the country.
"They keep banking on the military as our partner in Egypt, and that does not comport with the reality in Egypt now," said Michele Dunne, director of the Rafik Hariri Center for the Middle East at the Atlantic Council.
"The military still has some influence, but civilian institutions such as the parliament, and a new president to be elected in May ... are going to become much more important. And I think they are making a real mistake here, just placing their bet with the military."
U.S. officials said the decision to release the aid also avoided disruption of existing defense contracts, which could have led to expensive termination costs that could have exceeded $2 billion.
Congress has approved $1.3 billion in military aid to Egypt - the same level the country has received for years - for this fiscal year, which ends on September 30. Congress also approved $250 million in economic aid and up to $60 million for an "enterprise fund."
Clinton further certified that Egypt is meeting its obligations under its peace treaty with Israel, an additional requirement for U.S. aid to flow.
Some U.S. lawmakers have criticized the move, saying it was inappropriate to waive conditions on military aid while the Egyptian government's transition was so uncertain.
Senator Patrick Leahy, the Democratic chairman of the Senate subcommittee on foreign aid who wrote the law imposing conditions on aid, said the United States should release no more money than is "demonstrably necessary."
"The Egyptian military should be defending fundamental freedoms and rule of law, not harassing and arresting those who are working for democracy," Leahy said on Thursday.
The State Department said it remained committed to helping Egypt further its democratic gains, including protections for civil society groups and non-governmental organizations.
"We remain deeply concerned regarding the trials of civil society activists — non-Egyptians and Egyptians alike — and have raised these concerns at the highest levels, urging an end to harassment," the U.S. statement said.
The law still requires Clinton to consult congressional appropriators before any funds are actually transferred to Egypt, and U.S. officials said they would be keeping a careful eye on Egypt's political development.
"We have the flexibility to adjust what is being disbursed out of this assistance and we obviously ... will be watching the situation on the ground to decide if we need to exercise that flexibility at any time," one senior U.S. official said.
(Additional reporting by Susan Cornwell and Arshad Mohammed. Editing by Christopher Wilson)