Americans are held as protests continue in Cairo, Egypt.

Relations between Egypt and the United States reached a new low yesterday when Egyptian officials published a list of 43 people, including 19 Americans, accused of interfering in Egypt’s internal politics. The Americans, including Sam LaHood (son of Transportation Secretary Ray LaHood), who is the country director for the International Republican Institute, have been banned from leaving the country and could soon be brought to trial. Egypt’s transitional government claims that they illegally funded political groups in Egypt’s parliamentary elections, while the non governmental organizations (NGOs) insist that they provided Egyptians with only technical assistance to help them take part in the elections.

One of the lawyers of those charged claimed that the NGO officials have become pawns in a struggle between the Egyptian and American governments over aid policy. But in actuality, they have become hostages in a much larger struggle: the struggle for freedom in Egypt against an unholy alliance between Egypt’s transitional military government and the Islamist political parties who will soon assume power.

Both groups oppose Western concepts of democracy, and the transitional military officials seek to ingratiate themselves with the Islamist political parties in order to preserve their privileged position under the new regime. The anti-Western Muslim Brotherhood and other Islamist political parties dominated Egypt’s parliamentary elections and are slated to call the shots in post-Mubarak Egypt.

The liberal urban elite who led Egypt’s “Facebook revolution” last February were overwhelmed by better-financed and better-organized Islamist parties that manipulated religious symbols to appeal to Egyptian voters, particularly the one-third of the electorate who are illiterate. As The Heritage Foundation warned before the fall of President Hosni Mubarak, the Muslim Brotherhood was the predictable winner of any immediate elections and will steer Egypt away from the United States and the West.

Now Cairo has taken action to persecute NGOs that were tolerated in Mubarak’s Egypt. And the new government may exploit the situation to put on show trials to discredit secular and liberal Egyptian political parties that now form its chief opposition.

The Obama Administration should take quick and decisive action to free the hostages in Egypt. It should freeze U.S. foreign aid to Cairo and give Egypt’s new leaders an ultimatum: free the American hostages or permanently lose U.S. foreign aid and any American help in refinancing Egypt’s burdensome national debt.

The prospective loss of more than $1.3 billion in annual assistance and American opposition to new loans from international lending institutions may exert a powerful influence in persuading Egypt’s new leaders to discontinue their politically motivated prosecutions. Egypt faces an increasingly bleak economic future without substantial foreign assistance. And the new government is unlikely to stay in power for long unless it can improve Egypt’s faltering economy.

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