Todd Blanche defends handling of Jeffrey Epstein files in Senate confirmation hearing

Todd Blanche defended the Department of Justice's handling of files related to late sex offender Jeffrey Epstein on Wednesday as he testified at the Senate Judiciary Committee about his nomination by President Donald Trump to become U.S. attorney general.

Blanche, who is currently the acting attorney general, also faced criticism from Sen. Dick Durbin, D-Ill., for holding cryptocurrency-related assets last year while "you issued an order dismantling DOJ's crypto enforcement team and shutting down ongoing criminal investigations in the crypto industry."

Blanche has yet to respond to Durbin's criticism of his crypto holdings at the hearing.

In response to a question by Judiciary Committee Chairman Chuck Grassley, R-Iowa, about the Epstein files, Blanche said, "We worked hard, hardworking lawyers within the department, to do the right thing, and we will continue to do so."

Blanche said that when Trump signed a law last fall requiring the DOJ to make public all of the documents it held related to Epstein, the department "undertook a Herculean task to review millions and millions of potentially responsive files.

Blanche in January, as deputy attorney general, said the DOJ would not publicly release millions more pages about Epstein after initially disclosing more than 3 million pages.

In his testimony on Wednesday, Blanche said some of the withheld files were not responsive to the demands of the law because, among other things, they included information related to another case involving someone else named Epstein.

The DOJ, in a Jan. 30 statement about the final release of the files, said those that were withheld fell into several categories, including duplicate documents from different investigations and those withheld under certain legal privileges.

A group of Epstein victims this week released a video urging the Senate to block Blanche as attorney general because their personal information was made public by the DOJ in the release of files even though that information should have been redacted.

On Wednesday, Blanche said, "The reviewers were qualified, experienced attorneys within the department and the FBI. They took pains to apply appropriate redactions. There were mistakes that were made, and so approximately 1% of the redactions had to be fixed after we released the Epstein files."

"Whenever we learned that any victim's name had been improperly not redacted, we immediately took the document down and fixed it as soon as we could," Blanche said. "That doesn't excuse the mistakes of which I take responsibility, but it does mean that we tried to fix them."

Blanche, who first drew national attention as a criminal defense lawyer for Trump, has served as acting attorney general since early April, when Trump fired Attorney General Pam Bondi over her handling of issues related to Epstein.

Trump in a Truth Social post on Tuesday praised Blanche, calling him a "great lawyer, always very fair," and writing, "every Republican Senator should vote to CONFIRM Todd Blanche, ASAP."

Blanche also faced questions on Wednesday about his decision to create a $1.8 billion so-called anti-weaponization fund for the DOJ to compensate people who were purportedly the victims of prosecutorial overreach by the Justice Department.

The fund, which Blanche said he canceled in the face of sharp criticism from Republican senators and Democrats, was part of an out-of-court settlement of a suit filed by Trump against the IRS over the leak of his tax records. While Blanche has said the fund won't be created, Trump has floated the idea of reviving its creation.

That settlement included giving Trump, his family members and related business entities effective immunity from audits, prosecution or regulatory enforcement action by the IRS for tax returns filed up to the date of the settlement in May.

On Monday, a Miami federal judge in a scathing order said Trump had sued the IRS for an "improper purpose," to obtain the appearance of "judicial legitimacy for a 'settlement' that had no viable basis in law or fact." The judge ordered that a copy of her order be sent to the New York State Bar Association, of which Blanche is a member, and which is considering a pending ethics complaint against him.

Durbin, the top Democrat on the Judiciary Committee, told reporters on Tuesday afternoon that he had a 30-minute meeting with Blanche earlier in the day that included a discussion about the DOJ fund.

Durbin said Blanche told him: "'What more can I do? What more can I say? I made a mistake. I don't want to see the weaponization fund go forward.'"

Durbin said he then asked Blanche, "Why don't you put it in writing? Do something so it's a credible statement by you?"

The senator recounted that Blanche said he would be willing to work with Congress to codify that the fund can't be created.

"It seemed like a very weak defense," Durbin said.

CNBC has requested comment from the DOJ about that account, and about Durbin's description of how Blanche addressed the issue of cryptocurrency during their private meeting.

Durbin has been a critic of Blanche taking the attorney general post since he was nominated, saying he is concerned about money being made by Trump administration officials.

"I said to Todd Blanche, it just boils down to this: I don't think if you want to get rich you ought to be running for public office," Durbin said Tuesday. "I can't understand all the money that's being made in this administration."

Durbin said Blanche "did not address any of those things directly," but that he "addressed his own situation with cryptocurrency."

Blanche said he had consulted with the Office of Legal Counsel and ethics officials about his holdings in cryptocurrency, according to a Durbin aide who was at the session with reporters.

"He had $160,000 roughly in cryptocurrency and he was told that he had to divest it," Durbin said.

In this conversation with Blanche on Tuesday, Durbin told reporters, "I started off with the issue of corruption."

"And during the period of time when he was going through this process of turning it over to his children and grandchildren, there were decisions made about the regulation of cryptocurrency, which most people, and most of the things I've read, suggest that they were lessening the government scrutiny of their activity," the senator said.

"He's an owner of cryptocurrency. He's transferring it within his family. He's making decisions … involved in decisions at the Justice level as to the scrutiny of this industry," Durbin said.

"That sounds like it, on its face, to be a conflict of interest."

Another area of controversy Democrats are expected to focus on is the federal prosecutions of people Trump considers enemies — former FBI Director James Comey and New York Attorney General Letitia James — by the U.S. Attorney's Office for the Eastern District of Virginia, last fall. That office is overseen by the DOJ.

Both of those cases, whose allegations were strongly denied by both defendants, were dismissed by a judge in November after he ruled that the interim U.S. attorney who lodged the case was invalidly appointed.

— CNBC's Justin Papp contributed to this article.