Rhode Island's Olivia Culpo named Miss USA

(Reuters) - Olivia Culpo of Rhode Island was named Miss USA on Sunday after saying it would be fair for transgendered contestants to win the pageant, giving her a crown that she will wear when representing the United States at the Miss Universe pageant later this year.

Culpo competed in the traditional swimsuit and evening gown competitions at the Las Vegas pageant, but also answered a question - tweeted in from an audience member - about an issue that earlier this year vexed the organizers of the Miss Universe pageant in Canada when a transgendered woman wanted to compete.

Culpo was asked if it was fair that a transgender woman would win Miss USA over a natural born woman, and she answered, "I do think that would be fair, but I can understand that people would be a little apprehensive to take that road."

She went on to say that there are "so many people out there who have a need to change for a happier life. I do accept that because I believe it is a free country."

The audience reaction seemed mixed initially but quickly turned to cheers and Culpo gave two thumbs ups.

Later, when the winner's crown was placed on Culpo's head, tears came to her eyes as she accepted the congratulations of fellow contestants and walked the stage as the new Miss USA.

Earlier this year, Jenna Talackova, who underwent gender-reassignment surgery at age 19 and holds legal documents affirming her identity as a woman, was initially kicked out of the competition in the Miss Canada division, but was later reinstated by the Miss Universe organization's owner, Donald Trump.

Talackova, now 23, went on to compete in last month's Miss Canada pageant but did not win.

(Reporting By Bob Tourtellotte)