Even back in the best of times, the wordbonushad a tinge of excess and undue enrichment outside the canyons of Wall Street. That feeling intensified in mid-February as the biggest banks that received funds from the Troubled Asset Relief program came under withering scrutiny about how the money was used. And some are worried that the scrutiny will go beyond just the banks' executives and fall to the advisors' bonuses.

In a field where advisors receive a lot of their compensation as deferred payments, or loans that must be repaid over time, many are worried about the long-term ramifications. Indeed, one California-based advisor from Morgan Stanley worried that political pressure might force the joint venture to cancel previously announced retention package payouts. "People are worried [about] whether it's going to happen. I think it will. But will it be smaller because of political pressure?" said that broker. "Everyone is taking a hit here. We don't get bonuses year after year to do what we do. We get some of our compensation deferred and it feels like a bonus when we finally get it."

In one brow-raising incident, Morgan Stanley's Co-President James Gorman urged the company's brokers to call upcoming retention compensation "retention awards" and not "bonuses," in anticipation of the joint venture with Smith Barney.

But for now, advisors are keeping a close eye on how Congress and the wirehouses that received TARP funds work out their differences concerning executive bonuses. Lawmakers asked for a detailed accounting from all eight banks on how their TARP funds are being spent.

About $300 billion in TARP funds had been distributed as of Jan. 23, the latest figure available, according to the Office of the Inspector General for the Troubled Asset Relief Program.

To be sure, some are already thinking ahead to the day when the fallout could reach beyond financial companies, or even TARP recipients. "A lot of long-term decisions being made around compensation for TARP companies are going to influence decisions about [all] large companies," said David Lynn, a partner in the Washington, D.C. office of Morrison & Foerster and an expert on executive compensation.

The political pressure of today's new world weighed on bank executives who appeared before the House Financial Services Committee last month. They were called on to give a clear accounting of how the funds were used, including reconciling bonus payouts in a year when many of the firms lost money. Amid the high-profile hearings, when lawmakers took turns grilling the CEOs of eight big banks, the New York Attorney General's office upped the ante by launching its own investigation into Merrill Lynch's bonus payment practices, focusing on the weeks leading up to its acquisition by Bank of America.

In a letterto committee chairman Rep. Barney Frank (D-Mass.), New York Attorney General Andrew Cuomo updated the committee on its current findings into ongoing investigations of $3.6 billion in 2008 bonus payments made by Merrill Lynch. The payments were distributed earlier than usual, just before its acquisition by Bank of America was completed and before Merrill announced a $15.3 billion loss in the fourth quarter.

"One disturbing question that must be answered is whether Merrill Lynch and Bank of America timed the bonuses in such a way as to force taxpayers to pay for them through the deal funding," wrote Cuomo. When confronted with the findings in Cuomo's letter, Kenneth Lewis, chief executive officer of Bank of America, told Congress he had no personal involvement in the way that Merrill's bonuses were distributed, and that Merrill Lynch was urged to reduce those payments.

For its part, JPMorgan Chase & Co. lent $150 billion in new loans in the fourth quarter, including an average of $15 billion in overnight loans to other banks, according to Chief Executive Officer James Dimon.

Yet legislators were not satisfied that the funds had been effectively distributed to finance home mortgages, small business loans and student loans. Dimon was taken to task about JPMorgan's lending activities, because on the surface the bank seemed to fund the same amount of loans after receiving TARP funds as it had before. The committee members also questioned why so many of the banks abstained from mortgage warehouse lending, choking off essential capital to mortgage brokers in their legislative districts.

Lawmakers also expressed frustration and outright anger at the executives for enforcing extremely tight rules on credit card holders and business loan customers in good standing, especially at a time when those customers needed leniency to weather tough times. In one emotional exchange, Rep. Walter B. Jones (R-N.C.), engaged Citigroup chief executive officer Vikram Pandit directly. Jones argued that companies like Citigroup should reduce penalty interest rates on credit cards from the current average of 24.5%, especially now that tax money was dedicated to TARP funds to help companies like Citigroup recover from bad business decisions, and American families are hurting so badly.