How often do we see a government operation end up with a profit? Ironies abound in this denouement of the Troubled Asset Relief Program (TARP), bitterly opposed by people across the political spectrum but proposed, passed, and extended in bipartisan votes in the dark hours of the financial collapse of 2008. The insurance conglomerate AIG was one of the biggest beneficiaries of TARP, and the target of much of the ire that resulted from the government’s $182 billion rescue, which gave it a large portion of ownership in the company while the money arguably constituted a second bailout of banks and other financial companies.

Today, though, Treasury sold the last of its stake in AIG — and ended up with a $22.7 billion profit off of the bailout “investment”:

The U.S. Treasury’s sale of its remaining stake in American International Group Inc (AIG.N) will fetch $7.6 billion, bringing the government a total profit of $22.7 billion from its crisis-era bailout of the insurer. The share offering will close the chapter on one of the most politically contentious rescues of 2008, which ultimately gave AIG up to $182 billion of government support. At one point, the government estimated that it would never recover all of the bailout money, but as AIG restructured and returned to viability, it was able to repay the entire rescue fund plus generate a profit for U.S. taxpayers. AIG said on Tuesday that the Treasury agreed to sell 234.2 million shares to investors for $32.50 apiece. The insurer said that Treasury has additional AIG warrants that it can sell to boost the government’s $22.7 billion of total returns so far.

The Reuters article notes the most controversial part of the AIG bailout, which was the distribution of US funds to Europe:

The company also funneled over $90 billion of taxpayer money – more than half the funds the government used to rescue AIG – to various European and Wall Street banks, including Goldman Sachs, Deutsche Bank and Barclays Plc.

At the time, critics argued that Treasury was operating a back-door bailout of foreign financial firms, using AIG as just a smoke screen. That criticism is just as valid today, especially with the US backing the IMF’s efforts to bail out Greece, and perhaps especially since the AIG path was significantly less transparent. Congress should have exercised more control over the use of the bailout funds, but with a global collapse arguably in progress, they chose to act quickly at the expense of wisdom and, er, expense.

Still, it’s hard to argue with success. AIG has bounced back, its clients and investors haven’t lost their capital, and taxpayers even made a profit off of the investment, which is highly unusual these days for government investments. (Just consider Solyndra, A123,et al.) Does the profit justify the bailout? Take the poll: