In one of his final acts as Michigan governor, John Engler (R) is trying to ease state standards for toxic dioxin pollution, a move that could relieve Dow Chemical Co. of substantial liability for future cleanup operations at the company's headquarters and along a large watershed leading into Lake Huron.

The proposed rule change, negotiated by Engler's Department of Environmental Quality and Dow officials, has drawn fire from Gov.-elect Jennifer M. Granholm (D) and regional officials of the U.S. Environmental Protection Agency, who say it may be either illegal or precipitous. Karl E. Bremer, chief of the EPA's Region 5 toxics division, said in a letter to the state that "it does not appear that U.S. EPA guidance has been considered or followed in developing" the new standard and risk assessment models.

Granholm, the outgoing state attorney general, said during a campaign stop in a contaminated area downstream from the Dow facility: "There is a definite lack of governmental accountability here."

Environmental groups contend that Engler's business-friendly administration is trying to minimize Dow's long-term financial exposure to what may prove to be one of the largest corporate pollution cases since the EPA last year ordered General Electric to pay nearly half a billion dollars to dredge toxic PCBs from the floor of the upper Hudson River in New York.

Michigan officials and Dow executives dispute this, saying they are merely trying to put in place a long-discussed plan to study the extent and possible health implications of public exposure to elevated levels of dioxin in the central Michigan town of Midland, home to Dow Chemical, and downstream along the Tittabawassee River.

"We've been in negotiations with Dow for a year, so I don't think it's some rush type of process," said Patricia A. Spitzley, press secretary for the Michigan Department of Environmental Quality. "I don't think that in their desire to get their house in order before they leave that [administration officials] are compromising human health and the environment."

Yesterday, a coalition of Michigan environmental groups went to court in Lansing, the state capital, in a bid to block a proposed consent order that would allow the lower dioxin standard to take effect before Engler leaves office in January.

Dioxin is a potent toxin that can cause cancer and disrupt the immune and reproductive systems. It is a byproduct from the manufacture of Agent Orange, mustard gas, chlorinated pesticides and chlorophenol at Dow headquarters over the past half-century. Experts say the elevated levels of dioxin found in Midland soil likely came from the burning of chlorinated compounds, while the dioxin in the Tittabawassee flood plain likely came from waste ponds at the Dow complex that overflowed in a 1986 flood.

The proposed rule change would increase by more than ninefold the amount of dioxin allowed in Midland's soil -- from the current 90 parts per trillion to 831 parts per trillion. Some environmentalists say that if the proposed rule change for Midland prevails, it will become the de facto cleanup standard for the state -- an assumption that state and Dow officials dispute.

"I think the governor is trying to hand Dow Chemical a sweetheart deal that will essentially relieve them of a large part of their liability for contamination of what is the second-largest watershed in the Great Lakes," said Tracey Easthope of the Ecology Center, a nonprofit regional environmental group.

Dave Dempsey of the Michigan Environmental Council said Dow is eager to wrap up negotiations with its longstanding allies in state government before Granholm takes office next month. Russell Harding, director of the state environmental quality department, told the publication Chemical Policy Alert in late October: "Frankly, Dow would like to get this done with our administration here. The statements that the attorney general made in this campaign scare 'em to death."

Neil Hawkins, Dow's Michigan environment, health and safety leader, said the proposed new standard would continue to protect the public and is based on site-specific assumptions that "more realistically reflect actual exposure conditions."

"We believe the consent order, a legal process, is very consistent with regulatory and administrative processes of the state of Michigan," Hawkins said. "Dow's primary concern is with the health of residents who live in Midland and along the Tittabawassee River."

Gov. John Engler (R) is seeking to increase by more than ninefold the allowable level of the cancer-causing agent dioxin in the soil of Midland, Mich., the home of Dow Chemical.