Donald Trump said Tuesday Carrie Prejean can retain her crown as Miss California USA.

Trump, the owner of the Miss USA pageant, announced his decision at a news conference in New York City.

Prejean, 21, failed to reveal before last month's Miss USA pageant that she had posed in her underwear as a teenager. Trump saidthe pageant has determined the photos are "fine."

Monday, California pageant officials strongly criticized some of Prejean's actions, but they said only Trump could make the decision whether she should be stripped of her crown. The state pageant had been investigating the semi-nude photos and whether she violated her contract by making public appearances with groups opposed to same-sex marriage.