Todd Blanche defends handling of Jeffrey Epstein files at Senate hearing

Todd Blanche defended the Justice Department’s handling of files related to sex offender Jeffrey Epstein while testifying before the Senate Judiciary Committee on Wednesday about his nomination by President Donald Trump to be U.S. attorney general.

Blanche, now the acting attorney general, last year sued Sen. Dick Durbin, D-Ill., for holding cryptocurrency-related assets. “You issued an order disbanding the DOJ’s crypto enforcement team and closing ongoing criminal investigations in the crypto industry.”

Blanche has not yet responded to Durbin’s criticism of his holdings of cryptocurrencies at the hearing.

In response to a question about the Epstein files from Judiciary Committee Chairman Chuck Grassley, R-Iowa, Blanche said, “We have worked hard with the hard-working attorneys in the department to do the right thing, and we will continue to do so.”

When Trump signed a law last fall requiring the Justice Department to make public all documents it held related to Epstein, the department “undertook a Herculean task of reviewing millions and millions of potentially responsive files,” Blanche said.

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

In her testimony on Wednesday, Blanche said some of the withheld files did not meet the requirements of the law because, among other things, they contained information about another case involving someone else named Epstein.

In a Jan. 30 statement regarding the final release of the files, the Justice Department said those detained were divided into several categories, including duplicate documents from different investigations and those held under certain legal privileges.

This week, a group of Epstein victims released a video urging the Senate to block Blanche’s removal as attorney general because their personal information was made public by the Justice Department during the release of the files when the information should have been redacted.

On Wednesday, Blanche said: “The reviewers were qualified and experienced attorneys at the department and the FBI. They took care to apply appropriate redactions. There were errors that were made, so approximately 1% of the redactions had to be corrected after the Epstein files were released.”

“When we learned that no victim’s name had been improperly changed, we immediately removed the document and corrected it as soon as possible,” Blanche said. “This does not excuse the mistakes for which I take responsibility, but it does mean that we are trying to correct them.”

Blanche, who first gained national attention as Trump’s criminal defense attorney, has served as acting attorney general since early April, when Trump fired Attorney General Pam Bondi over her handling of Epstein-related matters.

In a post on Truth Social on Tuesday, Trump praised Blanche, calling her a “great lawyer, always very fair” and writing that “every Republican Senator should vote to CONFIRM Todd Blanche ASAP.”

Blanche also faced questions Wednesday about her decision to create a $1.8 billion so-called anti-gun fund for the Justice Department to compensate alleged victims of prosecutorial overreach.

The fund, which Blanche said she canceled in the face of harsh criticism from Republican senators and Democrats, was part of Trump’s out-of-court settlement of his lawsuit against the IRS over the leak of his tax records. While Blanche said the fund would not be created, Trump floated the idea of ​​reviving the fund.

That deal included granting Trump, his family members and related business entities effective immunity from audits, prosecutions or regulatory enforcement actions by the IRS for tax returns filed by the deal date in May.

In a scathing order, a federal judge in Miami on Monday said Trump sued the IRS for an “improper purpose” to gain “the appearance of legal legitimacy for a ‘solution’ that has no basis in law or fact.” The judge ordered a copy of his decision to be sent to the New York State Bar Association, of which Blanche is a member and which is considering an ongoing ethics complaint against him.

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

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 gun fund go forward.'”

Durbin said he later asked Blanche: “Why don’t you put this in writing? Do something to make it a credible account?”

The senator said Blanche said she would be willing to work with Congress to make it legal that the fund could not be created.

“It looked like a very poor defense,” Durbin said.

CNBC requested comment from the Department of Justice on this account and Durbin’s description of how Blanche addressed the cryptocurrency issue during their private meeting.

Durbin criticized Blanche’s handling of the attorney general post since her nomination and said he was concerned about the money being made by Trump administration officials.

“I told Todd Blanche, it comes down to this: If you want to be rich, I don’t think you should run for public office,” Durbin said Tuesday. he said. “I can’t understand all the money being made under this administration.”

Durbin said Blanche “didn’t address any of this directly,” but did “address her own situation with cryptocurrency.”

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

“He had roughly $160,000 in cryptocurrency and was told he had to dispose of it,” Durbin said.

“I started with the corruption issue,” Durbin told reporters during this meeting with Blanche on Tuesday.

“And during the period when he was going through the process of passing that on to his children and grandchildren, decisions were made regarding the regulation of cryptocurrency that most people, and most of what I’ve read, would argue that they reduce government scrutiny of his activities,” the senator said.

“He owns cryptocurrency. He transfers it within his family. He makes decisions… he’s involved in decisions at the Justice level regarding the scrutiny of this industry,” Durbin said.

“This appears at first glance to be a conflict of interest.”

Another area of ​​contention that Democrats are expected to focus on is the federal lawsuits filed last fall by the U.S. Attorney’s Office for the Eastern District of Virginia against people Trump considers his enemies: former FBI Director James Comey and New York Attorney General Letitia James. This office is overseen by the Department of Justice.

Both of those lawsuits, whose claims were vehemently denied by both defendants, were dismissed by a judge in November after the judge ruled that the interim U.S. attorney who filed the lawsuit had been invalidly appointed.

— CNBC’s Justin Papp contributed to this article.