If Bank of America had not been awarded $15 billion from the federal government, would they have gone through with the investment in CCBC?

They claim they are not funding the purchase with any of the TARP money, and that’s probably true, but I can’t help but think they might not have had $7 billion on hand to make the investment if they didn’t accept $15 billion with the other hand.

Bank of America Corp. will pay about $7 billion to almost double its three-year-old stake in China Construction Bank Corp., three weeks after being awarded $15 billion from the U.S. government to thaw frozen credit markets.

Bank of America, which is buying Merrill Lynch & Co., will boost the stake in China’s No. 2 bank to 19.13 percent from 10.8 percent, the Charlotte, North Carolina-based lender said today. It will buy shares from China SAFE Investments Ltd., a state investment arm that is the Beijing-based bank’s biggest stakeholder.

Bank of America isn’t funding the purchase with proceeds from the government’s Troubled Asset Relief Program, or TARP, said spokesman Scott Silvestri. Merrill received $10 billion through the Treasury’s $250 billion bank-rescue package.

Why didn’t they use their $7 billion to shore up their business first and accept just $8 billion from the government? It doesn’t matter which side it comes from, the pie tastes the same no matter how you slice it.

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