Including the son of transporation secretary Ray LaHood.

CAIRO (AP) — Ignoring a stern U.S. threat, Egypt on Sunday referred 43 NGO workers, including 19 Americans, to trial before a criminal court for allegedly using illegal foreign funds to foment unrest.

The decision marked a sharp escalation of the dispute between Cairo and Washington over Egypt‘s crackdown on U.S.-funded groups promoting democracy and human rights. The two countries have been close allies for more than three decades, but the campaign against the organizations has angered Washington and jeopardized the $1.5 billion in aid Egypt is set to receive from the U.S. this year.

On Saturday, U.S. Secretary of State Hillary Rodham Clinton warned Egypt‘s foreign minister that failure to resolve the dispute may lead to the loss of American aid. The Egyptian minister, Mohammed Amr, responded Sunday by saying the government cannot interfere in the work of the judiciary.

“We are doing our best to contain this but … we cannot actually exercise any influence on the investigating judges right now when it comes to the investigation,” Mr. Amr told reporters at a security conference in Munich.

Among the Americans sent to trial is Sam LaHood, the head of the Egypt office of the Washington-based International Republican Institute and the son of U.S. Transportation Secretary Ray LaHood. Five Serbs, two Germans and three non-Egyptian Arab nationals are also among those referred to trial.

All 43 have been banned from leaving the country. A date has yet to be set for the start of the trial.

The Egyptian investigation into the work of NGOs in the country is closely linked to the political turmoil that has engulfed the nation since the ouster nearly a year ago of President Hosni Mubarak, a close U.S. ally who ruled Egypt for nearly 30 years. The generals who took power after Mr. Mubarak’s fall have accused “foreign hands” of being behind protests against their rule and frequently depict the protesters as receiving funds from abroad in a plot to destabilize the country.

Those allegations have cost the youth activists that spearheaded Mr. Mubarak’s ouster support among a wider public that is sensitive to allegations of foreign meddling and sees a conspiracy to destabilize Egypt in nearly every move by a foreign nation.

But Sunday’s decision to refer the 43 to trial raises questions about the Egyptian military’s motive to allow the issue to escalate so much that the valuable $1.3 billion it gets annually be placed in jeopardy. Washington also is set to give Egypt $250 million in economic aid this year.

The U.S. assistance has allowed the Egyptian military to replace its relatively antiquated Soviet-era weaponry with modern and sophisticated arms, ranging from fighter-bombers and transport aircraft to tanks and personnel carriers. The aid is closely but informally linked to Egypt‘s continued adherence to its 1979 peace treaty with Israel, Washington’s closest Middle East ally.

Already, Egyptian authorities are preventing at least six Americans — including Mr. LaHood — and four Europeans from leaving the country, citing a probe opened last month when heavily armed security forces raided the offices of 17 pro-democracy and rights groups. Egyptian officials have defended the raid as part of a legitimate investigation into the groups’ work and funding.  (read more)