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Donald Trump held a press conference at 11:00 a.m. at Trump Tower in Manhattan on Tuesday, May 12, 2009. As the owner of the Miss USA pageant organization and the Miss Universe pageant, he made a pronouncement on the fate of Carrie Prejean, the first runner-up to Miss USA 2009, who is also the reigning Miss California.

The verdict is that Carrie Prejean will KEEP her title. Prejean took the podium after Trump made his decision public and she made a tearful speech, bringing her religion to the forefront in the context of her comments. She said that the second and third sets of topless photos were photoshopped. She reaffirmed her commitment to the Miss California organization and will serve out her reign.

The gorgeous blonde sparked controversy last month when she suggested that marriage should be strictly between a man and a woman. She was summarily dissed by the Miss California USA organization co-directors Keith Lewis and Shauna Mockler, who denounced the way she answered judge Perez Hilton‘s gay marriage question.

Prejean has not had any direct conversation with the Miss California USA organization since the pageant in Las Vegas. They named first runner-up Tami Farrell to a special post as their 2009 Beauty Ambassador as a short term measure so that public appearance commitments could be fulfilled in Prejean’s absence.

Then photos surfaced of a scantily clad Prejean. She claimed they were taken when she was an impressionable and naive seventeen year old. Now come semi-nude, topless photos, reportedly snapped after she had a breast implant procedure that was financed by the Miss California pageant organization.

In an interesting side note, Prejean’s high school wants to honor her. According to Trustee Jim Gibson of the Vista Unified School District in Southern California, they want to make June 1, 2009 ‘Carrie Prejean Day’. The school board will take a vote at their May 14 meeting to honor the 2005 Vista High School graduate.

Gibson said, “We’re setting her up as an example. As far as I’m concerned, she’s a great role-model and she’s a person who needs to be emulated.”

Check out the press conference video, followed by video of the California pageant officials on Larry King Live last night below.