The Egyptian government’s decision to investigate pro-democracy NGOs for criminal activity and the subsequent imposition of travel bans on democracy workers didn’t just ruin the plans of the six Americans now stuck there—it sparked a severe crisis in relations between Cairo and Washington. But how the Obama administration responds hinges on a question that it feels has not yet been answered: Is Egypt’s current government deliberately instigating conflict, or just incapable of managing its own affairs?

Though Congress has been pushing to withhold some portion of the annual foreign military funding—currently at $1.3 billion per year— that the U.S. has given Egypt since 1987, the White House has been understandably cautious. It’s not just that the White House is hesitant to lose good relations with the Supreme Council of the Armed Forces (SCAF), the military junta that has ruled Egypt since Hosni Mubarak’s ouster last February. The real issue is that the Obama administration doesn’t yet believe that the SCAF is directly responsible for the inquisition against the NGOs, ascribing blame instead to Egyptian government officials whose actions are supposedly beyond the SCAF’s legitimate control. There won’t be a clear response from the White House until it has determined to its satisfaction whether Cairo has been acting maliciously, or just incompetently.

Washington isn’t the only place where this question is being asked. The question vexes practically everyone with an interest in Egypt— Egyptians most of all. In the aftermath of a recent massacre at a soccer game in Port Said, in which 73 people were killed, Egyptians were deeply divided over whom to blame. Egypt’s youth protesters, including many of the forces that catalyzed the January 2011 revolt that toppled Mubarak, argued that the SCAF had orchestrated the violence. “They are using the same scenario that Mubarak was trying to threaten us last year, when he said either me or chaos,” Shadi El- Ghazali Harb, a leader in the Coalition of Revolutionary Youth, told me. “In the previous match, the [fans] were chanting messages against the SCAF, so it was a punishment for them as well.” As proof of the SCAF’s direct instigation of the massacre, the youth activists noted that the gates that normally separated the two teams’ fans from one another were left open, while the exit gates had been welded shut, trapping those fleeing the onslaught. Moreover, activists observed that Port Said’s governor and security chief were conspicuously absent from the match. “They always attend such matches,” said Harb.

Others, however, blamed local security forces. In a statement following the assault, the Muslim Brotherhood didn’t denounce the SCAF—they called on it for help, asking it “to address the involvement of the police apparatus that could have prevented this disaster, but instead contented itself by acting as a spectator.” Meanwhile, a parliamentary fact-finding committee, headed by an MP from the Salafist Nour Party, blamed local security authorities in Port Said and the Egyptian Football Authority (EFA), noting that the EFA, “did not perform thorough searches and allowed fans holding solid objects, lasers and weapons to enter the stadium.” The parliament’s subsequent efforts to hold the government accountable largely absolved the SCAF.

The debate over the prosecution of pro-democratic NGOs follows the exact same pattern. On one hand, there is ample evidence of the SCAF’s direct involvement in this crackdown. When Egypt’s public prosecution office first raided the NGOs on December 29, military personnel reportedly backed the operation. “It was organized and in favor of polishing the image of the army in front of the people, so everyone feels scared and feels that they cannot live without them,” said Hossam Eldin Ali, director of the Egyptian Democratic Academy. Moreover, the state-run media—which falls under the SCAF’s control— has repeatedly supported the raids. In this vein, the top headline in Tuesday’s edition of the official daily Al-Ahram read “American Funding Aims to Spread Chaos in Egypt.” Finally, after the initial raid, Field Marshal Mohamed Hussein Tantawi, who chairs the SCAF, reportedly promised U.S. Defense Secretary Leon Panetta that the targeted NGOs would be permitted to reopen—thus implying the SCAF’s authority over the situation.

But there are also good reasons to doubt the SCAF’s direct culpability. For starters, the investigations followed from complaints made by Minister of International Cooperation Fayza Abul Nega, one of the government’s few holdovers from the Mubarak era. Abul Nega has long demanded that her ministry have oversight over NGOs, and she was quick to express anger when, shortly after last year’s revolt, Washington gave approximately $54 million to pro- democracy groups unregistered with the government. It’s not far- fetched to believe that Abul Nega would have pursued the matter without consulting other members of the government. After all, Abul Nega takes pride in provoking confrontation with Washington, and recently called American criticisms of her actions “a medal on my chest.” The SCAF, meanwhile, has asked her to dial back her rhetoric.

Now that investigations are underway, however, the SCAF says that it cannot legitimately intervene without undermining the Egyptian justice system, flawed though it may be. In defending that position, the SCAF cites the letter of U.S. policy. The most recent conditions on foreign military funding to Egypt, which was signed into law in December, require the government to support “due process of the law.” The SCAF now argues that stopping the investigations would be tantamount to undermining that provision.

Ultimately, most of the SCAF’s explanations amount to mere obfuscation. Even if it cannot interfere with the investigation into NGOs for which Abul Nega advocated, the very fact that it has retained a notorious anti-American official as Minister of International Cooperation demonstrates the military’s malice. “[Abul Nega] is the point man,” said U.S. Copts Association president Michael Meunier, who has also been prevented from leaving Egypt. “The regime since 2004 has been using Fayza to point at the U.S. … [She] could have been removed any time.” Indeed, Egypt’s cabinet has been reshuffled three times over the past twelve months—and Abul Nega has been among the few constants.

In the end, an evil SCAF and an incompetent SCAF yield the same outcome: rising tensions between Washington and Cairo, and an Egyptian government that continues to feed its people the myth that U.S.-funded organizations are fomenting local chaos. Of course, given the geopolitical centrality of Egypt to Middle Eastern affairs, Washington still needs a working relationship with Egypt’s military. But the SCAF’s lack of discipline, or lack of common sense, has undermined the value of this relationship significantly. Whether the SCAF is wickedly targeting pro-democratic NGOs or simply unable to stop others from doing so, one thing ought to be clear: Washington’s relationship with it is no longer worth $1.3 billion.

Eric Trager is the Ira Weiner Fellow at The Washington Institute for Near East Policy.