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Trump Decides Not to Fire Miss USA Tara Conner

Miss USA Tara Conner is going to be given a second chance, pageant co-owner Donald Trump announced Tuesday.

"I've always been a believer in second chances. Tara is a good person. Tara has tried hard. Tara is going to be given a second chance," Trump said at a press conference, referring to allegations of Conner's drug use, underage drinking and sexual indiscretions.

Trump said Conner made some "very, very bad choices" as she left a small town in Kentucky, getting "caught up in the whirlwind of New York," and added that she would be entering rehab.

Video: Watch the press conference

Video: Trump and Conner take questions

He would not comment on drug test results and said some of the allegations against Conner are false. He also said her duties would be limited as she "receives the help she needs."

A tearful Conner spoke after Trump at the press conference:

"Walking in this morning, in no way did I think it would be possible for a second chance. I've had a very big blessing bestowed upon me — you'll never know how much I appreciate Mr. Trump for saving me on this one," she said. "He could have said 'You're Fired" — he's a very, very compassionate person."

Turning to Trump, she added, "You'll never know what this means to me, and I swear I will not let you down."

Conner declined to comment on reports that she failed a drug test, but said she'd learned that as Miss USA "you have to watch what you do.

"Anything with a drug issue, I don't have a comment on anything like that," she told reporters. "I wouldn't say I'm an alcoholic. I think that's pushing the envelope just a little bit ... My personal demons are my personal demons."

But later, Trump elaborated on Conner's alleged drinking problems.

"I don't think she denies she's an alcoholic. I think she's not very sure, and usually when you're not very sure that's not a good (sign)," he said, adding that there would be drug testing done during the rest of Conner's reign.

He emphasized that he had great faith in the current Miss USA's ability to recover from the scandal.

"Tara is going to be the great comeback kid," he said.

Before he met with Conner Tuesday morning, Trump told "FOX and Friends" that he was going to talk to her to try to learn the truth about her alleged bad behavior — which reportedly ranged from cocaine abuse and excessive drinking to kissing Miss Teen USA Katie Blair in public.

"Frankly, I have a lot of compassion for this young woman — she's had some problems," Trump said on FOX.

Trump, who also co-owns the Miss Universe pageant, said he'd been faced with a decision about dethroning a pageant title holder before, but that time the choice had been clear.

"In 2002, if you remember, there was a young woman from Russia, Oxana Fedorova," he told FOX. "She did a terrible job as Miss Universe. She was lazy and every other thing you can think of. And I enjoyed firing her. This particular case is not that. It's a different situation."

Video: Trump Talks to 'FOX and Friends'

Miss USA President Paula M. Shugart told reporters after Tuesday's news conference that she would not comment on any of the allegations that have swirled in the last week about Conner — saying only that she has "several personal issues" — but she did want to clear up some reports about Blair, Miss Teen USA.

"She does not live in New York," Shugart said. "She was in New York for three weeks." Some reports circulated that Blair was one of Conner's roommates.

Conner's predecessor, Chelsea Cooley of North Carolina, told reporters after the news conference that the negative press surrounding the reigning beauty queen might turn into a good thing.

"Everyone says any publicity is good publicity," said Cooley, 23. "All in all, this is coming out very positive."

Cooley, who passed on the Miss USA crown to Conner in April, told FOXNews.com that she knows her successor and had spent some time with her, but the two had not gone out to clubs or parties together. Instead, the pair "went to dinner" and "hung out in the apartment," she said.

"I have no idea about the allegations," she said. "She is a good person."

The general public seemed to agree with Trump's decision to let Conner keep her tiara.

"Give her a second chance," said Monica Harding, 43, of Oxford, England.

"I thought he did the right thing," added high school senior Kevin Mroz, 17, of Chicago.

His father, Mike Mroz, said he disagreed with Trump at first, but then changed his mind.

"What he said made a lot of sense," said Mroz, 48. "Hopefully, she'll learn from it ... My wife (Colleen) said he really is a softie."

Meanwhile, Conner's ex-fiancé told the New York Post he believes rumors of her cavorting have been "blown out of proportion" by people jealous of the beauty queen.

"That's what's wrong with the world. Everybody puts their nose in other people's business," said Adam Mann, 23, of Jamestown, Ky. He and Conner broke up in August because of the pressures of her busy schedule, which made it difficult for them to spend time together, he said.

Every Miss USA must sign a contract about what is expected of her during the year she wears the crown.

Conner, who turned 21 on Monday, reportedly tested positive for cocaine and moved out of her apartment in one of Trump's luxury buildings on Manhattan's Upper West Side late last week, according to local newspapers.

"She does not live here anymore," a doorman at the Hudson River high rise told The New York Post this weekend. "She is not allowed anywhere on Trump property. She is certainly not allowed to come back. I don't think it was her choice, really."

But Trump told reporters Tuesday that Conner was moving back in immediately.

A variety of sources — most of them unidentified — have spilled tales of Conner's wild antics and nightclub escapades since coming to the big city last spring, after she was crowned Miss USA in April.

"There's no question that she's a party girl," Trump told the Post. "We have hundreds of thousands of young women around the world who look up to Miss USA and Miss Universe, and it's really important to set a high standard."

Conner also allegedly missed several scheduled appearances and balked at other pageant obligations.

If Conner would have been dethroned on Tuesday, first runner-up Tamiko Nash of California would have taken the crown.

'A Really Bad Drug Problem'

Conner's crown is safe as long as she doesn't break a single rule going forward, Trump said. But she has a lot of rumors to live down.

"She has a really bad drug problem," one unnamed source told the Post over the weekend. "Everyone at Miss USA hated her. She slept with [the band Blink 182's] Travis Barker and she sleeps with all the club promoters."

The beauty queen has also been romantically linked to two owners of the club Stereo and celebrities who party at the NYC hot spot, including MTV veejay Damien Fahey, according to the Post.

Conner has also been photographed clubbing with "Six Degrees" actor Jay Hernandez and former "American Idol" contestant Constantine Maroulis.

There were also rumblings about Conner's alleged lewd behavior in club bathrooms and recreational drug use back home in Russell Springs, Ky., before she even got to New York.

"She always partied," a source told the Post. "She's had deep-rooted difficulties."

But others who saw Conner at clubs said she just looked like a typical 20-year-old — albeit a beautiful one — painting the town red.

A source close to the New York nightclub Ultra told FOXNews.com that Conner had been there Dec. 8 with several other beauty-pageant titleholders for a private party for a photographer, held in one of the club's VIP rooms.

He said Conner wasn't drinking, but she was dancing and having fun.

"We didn't witness her drinking any alcohol," said the source, who was at the club when Conner was. "She was a young girl having a good time — she was dancing, she was having a great time, but nothing that would be out of the ordinary for someone her age."

Conner didn't appear to be engaging in any questionable sexual activity, either, he said.

"We didn't see her kissing anybody," the source told FOXNews.com. "There were guys in the VIP room, but it didn't look like any inappropriate behavior. She didn't stand out as, 'Oh my God, check out this girl, she's going wild.'"

The New York club Crobar said Conner had been there too, but hadn't gotten crazy there.

"We have seen her here before," a spokesman for the venue, who requested anonymity, told FOXNews.com. "She has definitely partied and enjoyed herself in the VIP area at Crobar ... She's not been out of control. We have not had any problems with her."

It isn't the first time problems have plagued a major American pageant. In July 1984, then Miss America Vanessa Williams of New York was forced to step down after nude magazine photographs she'd once posed for were circulated.

Suzette Charles of New Jersey served out the remaining two months as Miss America.

Conner, a 5-foot-5 blonde, has been competing in pageants since age 4. She told reporters Tuesday that she has dreamed of being Miss USA since she was 13.

After winning the Miss USA title, she finished fourth in the Miss Universe pageant in July.

"I am an easygoing, down-to-earth girl," Conner said in her contestant profile. "Throughout my life, hardships and different experiences have made me a very humbled, yet strong individual. It is because of these life lessons that I have become the person I am today."

FOXNews.com's Catherine Donaldson-Evans contributed to this report.