Bank of America was one of several banks that was able to play both sides of a Federal Reserve program launched during the 2008 financial crisis. While Bank of America was selling its assets to firms obtaining loans through the Fed program, the investment firm BlackRock—partially owned by Bank of America—was potentially turning a profit by using those loans to buy assets similar to those sold by Bank of America.

In November 2008, the Federal Reserve announced that, in addition to a series of lending programs intended to keep both the U.S. and world economies liquid, it would begin issuing federally backed loans to entities willing to purchase securities from the troubled financial industry through a program called the Term Asset-Backed Securities Loan Facility or TALF.

The purpose of TALF was to help the frozen credit market become liquid again. Securitized loans (loans that have been bundled) from a variety of industries – credit cards, auto sales, student loans and even equipment financing—were purchased by organizations with money guaranteed by the Fed. The loans were non-recourse, meaning that if the investment failed, the borrower would not be held responsible for repayment. The belief at the time was that if financing agencies, such as banks, were able to get assets off their books in exchange for cash, then they would be able to freely lend to consumers once again.

Bank of America was able to take advantage of the program by not only selling its assets through the program, but also to profit from non-recourse loans made to BlackRock, in which BofA has a seven percent ownership interest. BlackRock received $2.7 billion in loans from the TALF program to purchase assets. At the same time, Bank of America was also able to sell assets through the program to various investors that received more than $2 billion in federally-backed loans in order to do so. In total, $4.8 billion in loans benefited BofA.

Not only will Bank of America potentially profit from the subsidy BlackRock received from the Fed, but it was also able to increase its liquidity by selling its assets to other subsidized borrowers. According to the New York Times, “Federal auditors worried about firms like BlackRock, warning that such firms could use federally guaranteed loans to overpay for assets, creating a potential conflict of interest.”

Bank of America’s ownership stake comes from their September 2008 purchase of Merrill Lynch. Bank of America is one of only three corporate investors named by BlackRock as owners, the others are PNC Financial Services Group and Barclays PLC. The three organizations own 47 percent of the investment firm, with the rest owned by individual investors, institutional investors and employees.

TALF’s beneficiaries include large political contributors and foreign banks that were able to take advantage of a federally guaranteed investment strategy that posed little to no risk. In addition to Bank of America—one of the nation’s largest banks and most politically active financial institutions —other participants included Banco Itau, a Brazilian bank with a New York branch, which received $191 million in loans to purchase securities, and financial and political powerhouses like Prudential Insurance and Morgan Stanley, which received $1 billion and $5 billion in loans, respectively.

Bank of America benefited from other programs intended to address the financial crisis; it received $15 billion in TARP money through the Department of Treasury’s bailout efforts, which it paid back in full in 2009. And BlackRock is a participant in a program administered by the Federal Deposit Insurance Company (FDIC), which is very similar to TALF. That program is called the Public-Private Investment Program (PPIP), and was created at the same time and in conjunction with TALF, but operated independently. In PPIP, BlackRock is an Asset Manager, and one of relatively few major investment firms with access to billions of dollars in federally backed money to be used to purchase assets.

Yesterday’s data release from the Fed reveals details behind this program as well as details behind other emergency lending programs created by the Fed. Bank of America and BlackRock are merely one example of the intertwined web of financial relationships complicating attempts to identify who or what benefited most from the huge government bailout.

(Keenan Steiner contributed to this post)