(FORTUNE Magazine) – Lee Iacocca had just been fired as chairman of the Statue of Liberty-Ellis Island Centennial Commission, and no one expected him to take it lying down. He didn't. At a press conference the next day, Chrysler's feisty chairman came out swinging. ''I do not appreciate being disenfranchised on somebody's whim,'' he declared, calling the dismissal ''un-American'' and hinting that there was ''more here than meets the eye.'' There probably was, and Washington reveled in the possibilities. Interior Secretary Donald P. Hodel said he sacked Iacocca because of a potential conflict of interest. Iacocca was serving as chairman both of the privately run Statue of Liberty-Ellis Island Foundation, which has raised $233 million to restore the two monuments, and of the commission, which advises the Interior Department on how to spend the money. (He retained his post with the foundation.) Hodel stuck to his story, but almost no one believed him. Most speculation centered on Iacocca's vocal opposition to a National Park Service proposal to build a luxury hotel and convention center on Ellis Island. But there were other intriguing questions. Was White House Chief of Staff Donald Regan, who has disliked Iacocca for years, behind the dismissal? Were Republican strategists worried that Iacocca might run for President as a Democrat? If so, why hand a popular folk hero and consummate self-promoter a tailor-made issue? Regan insisted he had nothing to do with the affair, though Washington insiders doubt that Hodel would have acted without at least consulting him. Iacocca, for his part, disavowed any political ambitions, saying, ''I'd make a lousy President.''