The battle over dioxin contamination in this economically stressed region had been raging for years when a top Bush administration official turned up the pressure on Dow Chemical to clean it up.

On Thursday, following months of internal bickering over Mary Gade's interactions with Dow, the administration forced her to quit as head of the U.S. Environmental Protection Agency's Midwest office, based in Chicago.

Gade told the Tribune she resigned after two aides to national EPA administrator Stephen Johnson took away her powers as regional administrator and told her to quit or be fired by June 1.

The call came as the Tribune was preparing to publish a story about the dioxin issue and Gade's crusade.

Jonathan Shradar, an EPA spokesman in Washington, said Gade has been placed on administrative leave until June 1. He declined further comment, saying the agency does not publicly discuss personnel matters.

Gade has been locked in a heated dispute with Dow about long-delayed plans to clean up dioxin-saturated soil and sediment that extends 50 miles beyond its Midland, Mich., plant into Saginaw Bay and Lake Huron. The company dumped the highly toxic and persistent chemical into local rivers for most of the last century.

Many local residents see Dow as a lifeline in region plagued by plant closings and layoffs. But all along the two wide streams that cut through this old industrial town, signs warn people to keep off dioxin-contaminated riverbanks and to avoid eating fish pulled from the fast-moving waters. Officials have taken the swings down in one riverside park to discourage kids from playing there. Men in rubber boots and thick gloves occasionally knock on doors, asking residents whether they can dig up a little soil in the yard.

Gade, appointed by President Bush as regional EPA administrator in September 2006, invoked emergency powers last summer to order the company to remove three hotspots of dioxin near its Midland headquarters.

She demanded more dredging in November, when it was revealed that dioxin levels along a park in Saginaw were 1.6 million parts per trillion, the highest amount ever found in the U.S.

Dow then sought to cut a deal on a more comprehensive cleanup. But Gade ended the negotiations in January, saying Dow was refusing to take action necessary to protect public health and wildlife. Dow responded by appealing to officials in Washington, according to heavily redacted letters the Tribune obtained under the Freedom of Information Act.

Regional EPA administrators typically have wide latitude to enforce environmental laws, but in April Gade drew fire from officials in Washington after she sent contractors to test soil in a Saginaw neighborhood where Dow had found high dioxin levels. The levels in one Saginaw yard were nearly six times higher than the federal cleanup standard, and 65 times higher than what Michigan considers acceptable.

On Thursday, Gade said of her resignation: "There's no question this is about Dow. I stand behind what I did and what my staff did. I'm proud of what we did."

Dioxin, measured in trillionths of a gram because it is so toxic, was a manufacturing byproduct of the herbicide Agent Orange and other chlorinated chemicals. Company documents show Dow knew by the mid-1960s that it could make people sick or even kill them. Citing years of independent studies, the EPA says dioxin causes cancer and disrupts the immune and reproductive systems, even at very low levels.

Concerns about dioxin contamination were behind two of the most infamous environmental disasters in U.S. history: the evacuations of the Love Canal neighborhood in upstate New York and the entire town of Times Beach, Mo.

But in the Saginaw area, cleanup remains stalled, mainly because Dow asserts the contamination does not threaten people or wildlife.

"There is all of this mystique about dioxin," said John Musser, a Dow spokesman. "Just because it's there doesn't mean there is an imminent health threat."

Dow says it has agreed in principle to restore polluted areas but is contesting how it should be done—which critics view as more stalling.

"Denial and delay has been part of Dow's game plan for years," said Michelle Hurd Riddick, a Saginaw nurse and member of the Lone Tree Council, a local environmental group. "They still haven't delivered."

Dow was forced to stop releasing dioxin into waterways in the mid-1980s. But when high levels of dioxin were found in fish from Saginaw Bay around the same time, Dow repeatedly claimed it wasn't responsible, saying the chemical had settled into the water from air pollution caused by forest fires and wood-burning fireplaces.

Dow and Michigan officials took until 2003 to negotiate legal guidelines for a comprehensive cleanup. The company later paid to scour the interiors of more than 300 homes and spread wood chips outside to reduce exposure to contaminated soil. At the same time, Dow's political allies tried to relax the state's dioxin standards.

More recently, Dow financed a University of Michigan study that the company and its supporters say shows dioxin in soil and sediment has little to do with levels of the chemical in people. The EPA cautions the study hasn't been peer-reviewed and appears to underestimate health risks.

"Dow has powerful sway in that area and in the state as a whole," said Dave Dempsey, a former Michigan activist who was environment adviser in the 1980s to then-Gov. James Blanchard. "But with all of the information out there about dioxin, it's becoming increasingly difficult for them to avoid doing something."

At the center of the latest dispute was Gade, who as a corporate attorney had represented big companies like Dow against environmental regulators. Her aggressive action against Dow surprised the company, local activists and her Washington bosses. But she still won high marks from EPA officials during her last performance evaluation.

The steps Gade took were influenced in part by her experience as an EPA staffer during the early 1980s, when the agency's top official in Washington was forced to resign after he allowed Dow to censor an EPA study documenting dioxin's dangers.

"We have a responsibility to make sure people are living in a healthy and safe environment," Gade said. "This problem has been out there for more than 30 years, and it's unconscionable that action hasn't been taken."

"We know Dow is responsible," said Ralph Dollhopf, associate director of the EPA's regional Superfund office. "The question now is when something will finally be done about it."

In Saginaw, some are reluctant to question one of the area's biggest employers and benefactors. They tout Dow's 3,100 manufacturing jobs and its donations to community and arts groups, including its sponsorship of a struggling civic arena, now known as the Dow Event Center.

Bob VanDeventer, president of the Saginaw County Chamber of Commerce, said local leaders are trying to fight the perception that dioxin makes the area unsafe. He argued "not one illness" can be attributed to dioxin and insisted the only way someone could be exposed to dioxin is if they "eat the dirt."

"Michigan is in the tank economically already," VanDeventer said. "For us, this situation certainly creates more uncertainty as long as it remains unresolved."

Others who were drawn to living along the picturesque Tittabawassee and Saginaw Rivers fear the contamination will make it impossible to sell their homes or will get them sick.

For more than 40 years, Lloyd and Joy Cooper have lived in a cottage near where the tree-lined rivers meet. Contractors for the EPA and Dow have tested their yard at least four times in two years.

In February Dow told federal regulators they had found dioxin levels of 5,900 parts per trillion in the Collins' neighborhood, above the federal cleanup standard of 1,000 parts per trillion. Michigan's far more stringent limit is 90 parts per trillion.

"It gets pretty frustrating," said Lloyd Cooper, a retired contractor. "It seems like they're dragging this out as long as they can. If they're going to do something, do it and get it over with for good."

mhawthorne@tribune.com