WASHINGTON — Interior Secretary Donald P. Hodel, declaring that he would not be "bullied," announced Wednesday that he has fired Chrysler Chairman Lee A. Iacocca as head of an advisory commission on the restoration of the Statue of Liberty and Ellis Island.
Iacocca, in a prepared statement read by a spokesman in Detroit, swiftly branded Hodel's remarks "off the wall and in clear contradiction of the facts."
Hodel said he told Iacocca that he no longer could serve as both chairman of the commission, which advises the Interior Department on how to restore the monuments, and chairman of a private foundation that has raised money to finance the refurbishing.
In his statement, Iacocca replied: "I resent any inference on his part of conflict of interest. The truth is the secretary is in conflict with his own charter. This is a grab for four years' worth of contributions by the American people."
Iacocca's spokesman said the Chrysler chief would elaborate at a news conference today in Detroit.
Hodel said Iacocca, who probably will remain on the private foundation's board, refused to resign from the commission. He said he decided to announce that he had "terminated" Iacocca's service because supporters of the auto executive were displaying "increasing insistence" that he remain as commission chairman.
"I thought it important to make plain that the department will not be bullied in this situation," Hodel said.
Hodel stressed that that there is "no evidence, no suggestion of any wrongdoing" by Iacocca and praised him for having done "an excellent job" as head of the foundation. He noted that he had hoped Iacocca would resign "gracefully" and become a non-voting "chairman emeritus" of the commission.
"That obviously didn't happen so I had to take a somewhat more forceful stand," Hodel said.
He said he informed the White House about his decision on Jan. 30 and received a "negative reaction." He noted that he had not sought White House approval and added that he has heard nothing from the White House since then.
Panel Formed in 1982
The Statue of Liberty-Ellis Island Centennial Commission was established in 1982 as an advisory committee to the Interior secretary on the preservation of the monuments. Hodel said he believes the commission, whose members are appointed by the Interior secretary, has met only three or four times since its creation.
The fund-raising foundation, a private, nonprofit corporation, was formed in 1981 to raise money for the restoration and to select contractors, subject to Interior Department approval. So far, it has raised $233 million.
The dispute between Hodel and Iacocca began after an attorney for the private foundation sent telegrams Jan. 29 to two foundation members who also sat on the commission. The attorney, Palmer B. Wald, said Iacocca was requesting that there be no "crossover" of the two boards and that they should resign from one of the organizations. They both subsequently resigned from the foundation after Hodel agreed that they should, and the secretary named one of them, Armen G. Avedisian, a Chicago-area banker and businessman, as commission chairman Wednesday.
Asked for Resignation
When Hodel learned of the foundation attorney's telegrams, he said he decided that Iacocca was right and that the auto executive himself should also resign from the commission. Hodel sent Iacocca a telegram the following day asking for his resignation.
"I perceive you believe there is or could be a conflict of some sort in serving the two organizations involved in this very important project," Hodel said in the telegram. "Thank you for bringing this to my attention."
At Iacocca's request, he and Hodel met in the Interior secretary's office Feb. 4. According to Hodel, Iacocca disavowed the foundation attorney's telegrams and said they had been sent without his knowledge. The two men agreed that Iacocca's attorneys would meet with the Interior Department's lawyer to discuss the conflict-of-interest issue.
At Monday's meeting, according to Hodel, Iacocca again said he would not resign. So Hodel read Iacocca a letter: "I must inform you with regret that your chairmanship of, and membership on, the commission are terminated." Hodel signed it and gave it to Iacocca.
'Held in Abeyance'
On the following day, Iacocca wrote Hodel a letter expressing his understanding that Hodel's decision was "being held in abeyance" pending more talks between the attorneys. On Wednesday, Hodel sent Iacocca another letter: "I wish to assure you that my February letter to you was effective upon delivery, remains so, and is not being held in abeyance."
Hodel acknowledged that he had reappointed Iacocca to the commission in November, when Iacocca was also chairman of the foundation. Hodel said that although it had occurred to him that there was a possible conflict, he did not act accordingly.
"We were in the middle of the fund-raising campaign," he said, "and I did not focus on it."