Interior Secretary Donald Hodel said yesterday that he deliberately skirted the White House in deciding to fire Lee A. Iacocca as head of an advisory commission on the Statue of Liberty, partly out of concern that the administration's political advisers would reject the decision he regarded as correct.

"Had I started shopping the decision around, the political counselors would have said, 'You don't dare to do that to this man,' " Hodel said. "If I had checked, they would have said, 'There's all sorts of potential flak and fallout here.' "

But he acknowledged that he was somewhat stunned by the intensity of the reaction to the Chrysler Corp. chairman's dismissal, which has drawn heated denunciations from Democrats and some second-guessing by the White House personnel office.

"Bob Tuttle White House personnel director would probably have wished it otherwise," Hodel said. "But, when you've already gone off the diving board, it isn't much good to have somebody say there's no water in the pool."

Hodel's comments came as leading Democrats, including House Speaker Thomas P. (Tip) O'Neill Jr. (Mass.) and New York Gov. Mario M. Cuomo, continued to scythe political hay over Iacocca's abrupt ouster this week.

In a telegram urging Hodel to reconsider the decision, O'Neill called Iacocca "a recognized hero in his country" who "represents the can-do spirit that made a land of immigrants the greatest country in the world."

"If the United States government had been as negative to Mr. Iacocca's ancestors, they never would have been allowed to come to America in the first place," O'Neill said.

Cuomo, a potential candidate for the Democratic presidential nomination, questioned White House insistence that it was not involved in Iacocca's dismissal.

"I'm confused at how you could fire one of the most preeminent individuals in the United States, make a front-page story of it and say I didn't know anything about it," Cuomo said. "If the president didn't know about this, I don't understand that."

Iacocca, who said Thursday that the decision "borders on the un-American," declined to engage Hodel in another round. An aide said the Chrysler chairman "has spoken his piece. He has nothing more to say as far as Hodel is concerned."

The National Park Service, meanwhile, confirmed that it has endorsed a plan to convert half of Ellis Island, near the site of the statue, into a "high-prestige international conference center" with a hotel.

Iacocca contends that he was fired because of his opposition to the hotel/conference center. As chairman of the advisory commission, he would have had a powerful say in how the $230 million he helped to raise as chairman of a private fund-raising foundation was spent in restoring the island.

Deputy park director Denis Galvin said the agency selected the proposal, sponsored by a New York group called Center for Housing Partnerships, after requesting suggestions for private development of the 27-acre island.

He said the hotel and conference center could provide income to support a public visitor center on the other side of the island, where millions of immigrants waited for clearance in the "Great Hall."

"It is entirely consistent with our mission of historical preservation," he said. "It's an alternative that frankly we like."

Iacocca blasted the proposal as a "luxury hotel" that would be financed through "tax credits for the rich." His aide said Iacocca also is concerned that the development would make part of the island off-limits to public visitors.

Galvin said the 230-room hotel would be available for visitors during the peak summer tourist season, at about $75 a night. "I don't know that you could characterize this as a luxury hotel," he said, likening it to similar privately operated accommodations in Yellowstone and other national parks.

Galvin said the developers would be eligible for historic preservation tax credits.

Asked earlier this week what problems might arise from Iacocca's dual roles as fund-raiser and adviser, Hodel referred to a potential conflict from "implied promises" the foundation made to those "who sent in the money."

Hodel was not specific, but previously published reports suggest that foundation fund-raisers made various promises to major contributors -- that the Coca-Cola Co., for example, could sell its products exclusively in the monument's snack bar and that American Express Inc. could have private use of Liberty Island for business entertainment.

But many of the foundation's biggest contributors are represented on the advisory commission, raising questions about whether booting Iacocca off will necessarily abrogate those promises. Coca-Cola Chairman Roberto Goizueta remains a member, as does American Express President Louis V. Gerstner.

Hodel said yesterday the corporate members of the panel did not concern him, noting, "They are one vote, one voice. The chairman can set the agenda. There is a vast difference between the two."