In 2008, as the financial crisis unfolded in the United States, the banking industry elevated its lobbying and campaign spending activities . By the end of 2008, and during 2009, the biggest political spenders, on average, received the largest bailout packages . Is that relationship causal? In this paper, I examine the effect of political connections on the allocation of funds from the Troubled Asset Relief Program (TARP) to the US financial services industry during the 2008–2009 financial crisis . I find that TARP recipients that lobbied the government, donated to political campaigns, or whose top executives had direct connections to politics received better bailout deals . I estimate regression discontinuity design and instrumental variable models to uncover how election outcomes for politicians in close races affected the distribution of bailout funds for connected firms . The results do not imply that some banks were deliberately favored over others, just that favored banks benefited because of their proximity to the right people in power . If being politically connected matters in general, in times of crisis it matters even more.Supplementary Information: The online version contains supplementary material available at 10.1007/s11127-020-00871-w.