It nevertheless took 18 days before the president, pressed by Pence and others, dismissed the retired army lieutenant general, who had advised him on security issues throughout the 2016 presidential campaign.
Flynn was sacked as national security adviser in February after he made misleading comments to Vice President Mike Pence about discussions he had with the Russian ambassador to the United States.
When Flynn's clearance was renewed by the DIA, it didn't know of Russian payments he received, NBC News reported.
Yates said she felt it was critical to get the information to the White House "in part because the vice president was unknowingly making false statements to the public", and also because Flynn was compromised, given that the Russians knew he was misleading other officials.
"To state the obvious, you don't want your national security adviser compromised with the Russians", Yates told the committee.
In response to questions from two Texas Republicans at a Senate Judiciary subcommittee hearing, Yates painted a picture of a White House that kept the Department of Justice out of the loop ahead of the executive order's release.
Republican Sen. John Cornyn said her actions with regard to the executive order were "enormously disappointing" and accused her of undermining the powers of the President because she disagreed with Trump's order "as a policy matter".
She said Monday she did not - and that she had revealed no classified information herself. "General Flynn was given the highest security clearance by the Obama Administration", Trump said, "but the Fake News seldom likes talking about that".
Trump suggested in a separate tweet on Monday problems with Flynn, fired in February, should have been flagged by the previous administration.
White House spokesman Sean Spicer, confirmed that was the case: "It's true that the president, President Obama, made it known that he wasn't exactly a fan of General Flynn's, which frankly shouldn't come as a surprise to anyone, given that General Flynn had worked for President Obama, was an outspoken critic of President Obama's shortcomings".
Yates said she conveyed her concerns about Flynn to White House Counsel Don McGahn over the course of two in-person meetings at the White House.
It was only after Flynn's deceit spilled into public view as The Washington Post revealed Flynn's discussions with Russian Ambassador Sergey Kislyak that Flynn was shown the exit.
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Yates herself, a longtime federal prosecutor, was sacked by Trump on January 30 after refusing to defend his travel ban.
Former National Intelligence Director James Clapper during his Monday Senate testimony.
Before the full scope of Flynn's Russian connections were known, Obama urged Trump during their Oval Office meeting on November 10 not to hire Flynn.
The Guardian report went on to say that not only British intelligence but several other European intelligence agencies continued to collect information on the contacts between the Trump campaign and Russian agents, and conveyed that information to US intelligence agencies until the summer of 2016.
Trump repeatedly has said he has no ties to Russia and isn't aware of any involvement by his aides in any Russian interference in the election. The FBI is investigating whether members of the Trump campaign colluded with Russian operatives to influence the 2016 presidential election.
Trump hit back by dismissing suggestions that his team colluded with Russian Federation as a "hoax", and calling the congressional investigations into Russia's interference in the USA election a taxpayer-funded "charade". The revelation came after interviews with a host of former US officials, most of whom spoke on the condition of anonymity in order to discuss sensitive national security information.
Yates' warning about Flynn in January capped weeks of building concern among top Obama officials, former officials told the AP.
Yates was originally slated to appear before a House Intelligence Committee hearing that was cancelled.
Yates explained that during her confirmation hearing, future Attorney General Jeff Sessions posed the question to Yates if she would refuse an order "if the President asked me to do something that was unlawful or unconstitutional and one of your colleagues or even that would reflect poorly on the Department of Justice".
Senator Lindsey Graham, the subcommittee's chairman who called the hearing is a Russian Federation hawk and sometime critic of Trump who has been one of the leading Republican voices calling for a thorough investigation of Russian Federation and the election.
In hindsight, Trump would have been better served heeding his predecessor's advice, as the ensuing scandal over contacts with Russian Ambassador Sergei Kislyak quickly ended Flynn's controversial tenure as the president's national security advisor.