Of all the banks involved in the TARP bailout, none benefited quite like Bank of America. In 2004 and 2005, BofA purchased two different organizations: FleetBoston Financial, the seventh largest bank in America, based out of Boston, and MBNA, the credit card giant. This only cost a measly $75 billion, so they had enough leftover to buy The United States Trust Company Charles Schwab and LaSalle Bank for another $24 billion. Just prior to the great credit crisis of our lifetime (trademarked!), Bank of America bought Countrywide and their wonderfully toxic mortgage business for an additional $3 billion. All this brought BofA to the doorstep of the Treasury and Federal Reserve asking for $45 billion to cover their debts and help with the purchase of Merrill Lynch.

Outrage over Citigroup and JP Morgan Chase receiving TARP money paled in comparison to the public grilling of Bank of America. To jog some memories, BofA is the institution which announced an almost $6 billion payout of bonuses to employees of Merrill Lynch for their wonderful service destroying the bank. BofA has claimed that when the extent of Merrill’s financial woes were revealed, they no longer wished to purchase the bank, but were threatened by Treasury and Federal Reserve officials into completing the purchase. Merrill would have undoubtedly gone under had BofA not completed the takeover, but it is arguable whose best interest was being served by forcing the merger. Regulators have maintained that had BofA not bought Merrill Lynch, the credit crisis would have been much more disastrous with more global ramifications. That may be true, but the bait and switch done by the Office of Thrift Supervision to Washington Mutual surely shows that when in a pinch, the government can adjust the situation to stabilize and counter floundering financial institutions.

The bonuses paid to Merrill Lynch employees were doubly paid for by the shareholders as after the purchase, the SEC investigated and prosecuted BofA for non-disclosure of the planned pay-outs prior to the takeover. This fine was paid by the new BofA, the same investors who missed out on the information earlier. The logic of punishing the punished is mind-boggling, but the presiding judge ended up deferring to the SEC and fined BofA $150 million. This tiny one-time payment didn’t put much of a dent in the billions of profit BofA made each quarter of 2009. The SEC seems to be a dog with a loud bark and no bite.

There is one bright spot in all of this though. Bank of America was able to repay their $45 billion loan from the government, netting the government a little over $4.5 billion. The support given to BofA from the TARP money ended up providing a good foundation for the bank to rebuild upon. Merrill Lynch likely would have failed and torn down other institutions and millions of innocent people on their way down. Bank of America’s acquisition, though on some questionable terms and timing, staved off a much worse future. Paying off the loan was a way for the bank to get Congress off their backs. With no outstanding loan, there wasn’t a need for Congress to continue its pursuit of Bank of America.