JEFFERSON CITY | After months of questioning conflicts of interest at a Carrollton ethanol plant, the state Treasurer’s Office on Thursday rejected the plant's application for state financing assistance.

   Treasurer Sarah Steelman revoked conditional approval and rejected an application originally submitted in 2006 by Show Me Ethanol LLC for a $2 to $6 million loan through the state’s Big Missouri linked deposit program.

   The program lends state funds to small businesses at low interest rates to help them grow.

   In a strongly worded letter to Show Me Ethanol general manager Greg Thomas, Steelman said the ethanol production plant had had two years to clear up conflicts of interest and clarify details of the loan financing arrangement.

   “You have failed in every possible way to meet that obligation,” Steelman wrote.

   The ethanol plan won conditional approval for the linked deposit program in October of 2006.

   The conflict-of-interest issues centered on two of Show Me Ethanol’s investors: state Rep. John Quinn, a Chillicothe Republican, and Andy Blunt, brother of Gov. Matt Blunt.

   Steelman, a Republican, has long taken a zero-tolerance approach to situations in which a government official or relative could benefit from state assistance. The state legislature softened that policy in legislation this year so that lawmakers and relatives could have up to a 2-percent stake in companies receiving state grants or loans.

   When reached for comment, Thomas said the treasurer’s decision was a “complete surprise.”

   “This was unexpected,” he said. “In our last conversation, she indicated we were ready to move forward.”

    Quinn said he believed the conflict of interest issues had been resolved by the legislation and that Show Me Ethanol and the Treasurer’s Office were still negotiating the loan financing.

   He also suggested Steelman’s decision could be sour grapes for her unsuccessful run for governor.

   “Sarah Steelman is a lame duck who was beaten by a pro-ethanol candidate,” Thomas said, referring to U.S. Rep. Kenny Hulshof, who beat Steelman in the Republican gubernatorial primary. “This was a retaliatory, spiteful act and I have no idea on what basis it comes from. This is just her throwing a hissy fit.”

   A spokeswoman for Steelman’s office said uncertainty remained about Quinn and Andy Blunt’s investment in Show Me Ethanol because the treasurer could not determine their involvement in Central Missouri Biofuels, LLC, one of Show Me Ethanol’s investors.