is caused by the water that alcohol absorbs when exposed to it. E85 has co-solvents added which allow it to absorb some water without separating from the gasoline. But these will only do the job up to the point of saturation where the water-laden ethanol separates from the gasoline, sinks to the bottom and begins to oxidize whatever reactive metal it comes in contact with.
For anyone interested in how this works: E85 explained