The United States has been giving Egypt about $2 billion per year for over 30 years. In return, Egypt was mostly friendly to the U.S. and Israel. Now that Egypt has a fledgling democratic government, America wants its foreign policy to remain the same. So Congress put some conditions on aid:
In a bid to keep the country’s military on the path to democracy, members of Congress, led by Sen. Patrick Leahy (D-Vt.) tacked on conditions to U.S. aid to Egypt. The new rules required that the State Department certify that Egypt is committed to fair elections and abides by its 1979 peace treaty with Israel, and enact policies to protect “freedom of speech, association and religion and due process of law.”This is a good example of responsible legislating -- setting some rules but giving the President waiver authority. But it's also a case where the U.S. doesn't really want to have to impose punishment, since that would likely be self-defeating. Somehow U.S. officials need to convince Egypt to accept the aid and the strings in its own best interests.
While the Obama administration objected vociferously to those restrictions at the time, they have become the key leverage in its talks with Egypt’s leaders. Under the new law, the White House could waive the certification requirement on national security grounds, but senior officials say a waiver would be politically impossible given the current ire in Washington over the crackdown on NGOs.
UPDATE: Obviously, the prospect of a trial of Americans who had been working with civil society groups in Egypt creates a real crisis in US-Egyptian relations whether or not the Leahy amendment was on the books.