The treasurer's office oversees a program that provides state money for banks to offer loans with below-market interest rates to ethanol and biodiesel plants. Steelman bars companies from getting incentives if they have even a single investor who is an elected state official, department director or a relative of those people.

The policy outrages some lawmakers who are investors in ethanol and biodiesel plants. Senators voted 21-10 about 2:30 a.m. Wednesday to overturn Steelman's policy by allowing the incentives so long as state officials own less than 2 percent of the business. The provision is an amendment to a larger tax credit bill and was approved on a head-count vote, avoiding a written record of who voted "yes" or "no" that would have been kept had they taken a roll call.

Rural lawmakers, many of whom invest in the plants, say Steelman's policy is not fair. They argue it punishes Missouri residents simply because they have invested in the same facility as a lawmaker.

The policy has prevented incentives from going to the $82 million Show Me Ethanol plant because its investors include Rep. John Quinn, R-Chillicothe; his wife, Mary; and Andy Blunt, a brother of Republican Gov. Matt Blunt.

"They were cowards, and didn't want to do what they did in the light of the day, because they didn't want the people of the state to realize they were protecting their personal interests," Steelman, a former senator, said later Wednesday.

Some senators say Steelman was out of line by insisting on an unreasonable conflict of interest policy.

"Our esteemed treasurer has been taking shots at 700 people because of the actions of two," said the amendment's sponsor, Sen. Dan Clemens, R-Marshfield, referring to the hundreds of other investors who would be hurt by denying incentives to Show Me Ethanol.

Missouri has several different types of incentives for ethanol and biodiesel plants. Besides the treasurer's office program, the Agriculture Department oversees production subsidies to the facilities and income tax credits to farmers who invest in ethanol, biodiesel or other value-added agricultural cooperatives.

In contrast to Steelman, the Agriculture Department does not consider it a conflict of interest unless an elected state official, his or her spouse or child owns at least a 10-percent stake in the business.

About 20 past or present state officials or members of their households have received more than $400,000 in tax credits for investing in value-added agricultural initiatives such as alternative fuels, according to state records provided to The Associated Press under a Sunshine Law request

Among those receiving the tax credits is Sen. Wes Shoemyer, D-Clarence, who spoke in favor of nullifying Steelman's strict conflict-of-interest policy for financial incentives to ethanol and biodiesel plants. Shoemyer contends it's unfair to target farmers who happen to also be legislators.

"The state treasurer has taken aim at certain investors and entities. We in the state of Missouri have a citizen Legislature, and that means a lot of us have other occupations that we derive our living from," Shoemyer said.

Steelman defended her policy.

"We maintain a strict conflict-of-interest policy in the treasurer's office because of one simple reason - it's the people's money, and we need to protect the taxpayers of the state," she said.