In the beginning of the process, it was the government that helped Elad acquire properties. A governmental mechanism was established in the late 1980s dedicated to transferring properties in East Jerusalem from Palestinians into the hands of settlers. This mechanism was founded under the leadership of then Minister of Housing, Ariel Sharon. Dozens of properties were transferred to Elad and Ateret Cohanim organizations without auctions and in violation of the rules of proper administration. Millions of shekels were handed over to these organizations; the organizations then established companies (which they owned) that charged the state for “handling fees” and project management fees for the “services” provided to the organizations; and the organizations used the powers of the Custodian of Absentee Property as a tool to declare properties as absentee and claim possession of them.
When the Rabin government was formed in 1992, it set up a commission of inquiry, the Klugman Committee, to examine the governmental assistance provided to the settler associations in East Jerusalem. The committee’s report revealed very alarming findings about the conduct of government officials in transferring properties to the organizations. Following the Klugman Report, the activity of the governmental mechanism was halted and the direct line of assistance from the government to Elad was weakened. However, Elad was already equipped with dozens of properties which served as the basis of settlement development in Silwan and beyond. For more information on the Klugman Report, see here.