From Matangi Tonga Magazine, Vol. 16, no. 2, September 2001.

When the Tonga Trust fund was established by in 1988 its purpose was as a kind of safety net for Tonga to accumulate moneys to be held in trust as a foreign reserve fund for the Kingdom to use in exceptional circumstances, and for future major development projects.

Its main sources of funds have been from the sale of the Tonga Protected Person Passports, the Tonga National Passports, from the government’s TongaSat income, and from interest earned on investments.

Under the Trust Fund Act the fund is to be administered by three trustees and the expenses of administering the fund are to be drawn from the government’s recurrent estimates. The current trustees of the TTF are the Prime Minister, Prince ‘Ulukalala Lavaka Ata, the Minister of Finance, Hon. Siosiua ‘Otuikamanu, and one other person appointed by His Majesty in Council, currently the Attorney General Hon. Tevita Tupou.

Trustees

In 1999 when the board authorized a, now controversial, portfolio allocation of $26.5 million, recommended by a financial advisor, Jesse Dean Bogdonoff, the trustees were, the former Prime Minister, Baron Vaea, the former Minister of Finance (now the Minister of Education) Dr Tutoatasi Fakafanua, and the Attorney General Hon. Tevita Tupou.

J. D. Bogdonoff was an investment specialist at the Bank of America, and he rapidly became more than just an employee of the bank in San Francisco. In one instant he resigned from the Bank of America where he said he had “discovered Tonga’s Trust Fund lying in a low interest deposit account, formed a company, the Wellness technologies Inc., got himself a licence as an Investment Broker—hired by the trustees of TTF for US$250,000 per annum plus other renumeration, and set out to invest Tonga’s US$27.7 million of national savings. At the same time J. D. proclaimed himself as the only Jester of the King of Tonga, showing of a decree signed by King Taufa‘ahau Tupou IV. He said he was made Jester because he wrote a poem for the king. J. D. Bogdonoff is a member of the Buddist, Soka Gakkai International, a Peace movement that has built a monument in Tonga. He played the tune “Dreams” at the monument dedication ceremony.

J. D. Bogdonoff became involved with the administering of the TTF in 1994, when he visited Tonga and discussed with the trustees ways of improving the yield of the fund, which was then deposited with the Bank of America, where he worked.

The fund grew for a while but hit troubles when a US$26 million repayment failed to come in this year.

New  trustees came into the TTF when Prince ‘Ulukalala Lavaka Ata replaced Baron Vaea as Prime Minister, and Hon. Siosiua ‘Otuikamanu replaced Dr Tutoatasi Fakafanua as the Minister of Finance.

Also in trouble is the Leiola Duty Free Provident Fund which was given to J. D. Bogdonoff to invest.