Under-performing banks that are politically connected received more bailout funds, according to a study by the University of Michigan's Ross School of Business.

According to the report, banks located in districts with House members serving on financial committees had a 26 percent increase in the funding they received under the Troubled Asset Relief Program. Likewise, bank executives holding a board seat at a Federal Reserve Bank increased their likelihood of receiving bailout money by 31 percent.

Applications for the largest TARP initiative, the Capital Purchase Program, are reviewed by the Federal Reserve--presenting a potential conflict of interest when bank ...