Some economists have criticized the bailout as a transfer of wealth from U.S. taxpayers to the bondholders and shareholders of recipient banks. "It's like Robin Hood the other way around," says University of Chicago economist Luigi Zingales.

But it is also a potential boon to wealth-management firms and private banks, ranging from the largest—including Wells Fargo, Morgan Stanley, JP Morgan, and Bank of America—to the smallest. Many are expanding their private banking units to attract customers fleeing the rubble of the financial crisis—leaving money managers who have disappointed them, or casualties such as Merrill Lynch (now owned by Bank of America) and Wachovia (acquired by Wells Fargo).

As Congress hammered out the bailout plan in October, J.P. Morgan's private bank reportedly saw inflows of as much as $1 billion every hour. U.S. Trust—a private banking unit of Bank of America—reportedly saw its managed assets grow by $13.8 billion during the first eight months of last year, adding more than 900 new clients. In the third quarter of this year, Northern Trust saw its deposits grow by 30 percent. "We had people in our lobby waiting to put money into the bank, not withdraw it," one executive told me.

Smaller banks that depend heavily on their wealth-management units, while offering conventional consumer banking services, also took bailout money. Beverly Hills-based City National—known as a "bank to the stars" for its focus on entertainment-industry clients—received $400 million.

In its 2007 annual report, City National bragged that it had "never foreclosed on a home mortgage loan that it originated" and that "virtually all of our home mortgage borrowers are our private-banking clients."

Northern Trust brings in 40 percent of its revenue from private banking and wealth management. Its customers include 20 percent of the Forbes 400 list of the richest Americans. The bank managed the assets of George W. Bush in a blind trust during his presidency, and reportedly gave the Obamas an advantageous rate on their home mortgage.

Northern Trust didn't need bailout funds. In fact, announcing the TARP infusion in October, Chief Executive Frederick Waddell stressed that his bank exceeded "by a considerable margin" the resources needed to be well capitalized.

Although the bank announced 450 layoffs, or 4 percent of its work force, in December, it has posted profits in all but one quarter over the past 22 years. In February, the bank bolstered its New York wealth-management group with two executives poached from competitor U.S. Trust.

Bailed-out banks aren't required to explain exactly how they will use the TARP money. Waddell said last fall that the funding would help "maximize growth opportunities." City National has previously defended its handout on the grounds that it would help create a "fortress balance sheet."

The money allocated to these firms is only a fraction of the $350 billion in bailout funds that Treasury has spent so far. (It is still doling out another $350 billion.) But the largest TARP recipients—including Citigroup, Bank of America, J.P. Morgan—are also the country's largest wealth managers, and there's nothing to stop billions in TARP money from flowing into expanding services for rich, low-risk clients, instead of helping struggling Americans.

Private banking has remained an oasis of stability and growth in the reeling financial sector. In 2007, the amount of money managed by private banks worldwide grew 128 percent—to $7.6 trillion.

While the recession has slashed the fortunes of many of the world's millionaires, private banks are finding opportunities for growth. It is one of the few businesses "likely to generate strong growth" this year, according to a recent Euromoney magazine survey.

By all accounts, the Treasury strongly encouraged many banks to participate in TARP. If healthy banks took the money, the reasoning went, lending would increase and there would be no stigma attached to the bailout program.

"Can you imagine someone saying 'I don't want this money because it's tainted?'" says Zingales, the University of Chicago economist. "And clearly annoy the government and get in trouble with the regulators?"

Involvement in the bailout has caused Northern Trust more trouble that it was apparently worth. After the dust-up over last month's golf tournament, and after Barney Frank, John Kerry, and more than a dozen other Congressmen called for the bank to return the money spent on the tournament, Northern Trust pledged to return all $1.6 billion it received from TARP "as quickly as prudently possible."

Still, hundreds of other banks declined to even fill out the two-page application for TARP funds. "A great number of my clients declined to apply," says Katie Edge, a Nashville attorney who works with community and retail banks. "Why have government in the boardroom if you don't need the capital?"