Former acting attorney general Sally Yates, a Barack Obama appointee who was sacked by Trump early in his presidency, made the disclosure during hotly-anticipated testimony before the Senate Judiciary Committee.
Yates said she told the White House six days into Trump's administration that Flynn, a former military intelligence chief, had not been honest with Vice President Mike Pence about his discussions with the Russian ambassador to Washington, leaving him vulnerable to leverage from Moscow.
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.
"We believed that General Flynn was compromised with respect to the Russians," Yates told the hearing in her first public comments on the scandal over ties between Trump's team and Russia, which has dogged the opening months of his presidency.
"This was a problem because not only did we believe that the Russians knew this but that they likely had proof of this information. And that created a compromise situation, a situation where the national security advisor essentially could be blackmailed by the Russians."
The testimony by Yates, who was fired on January 30 after defying Trump over his contested travel ban, confirmed reports she had informed the White House early on of the Justice Department's concerns about Flynn.
Yates did not say what Flynn had discussed with ambassador Sergey Kislyak in a number of December 2016 phone calls, which were secretly monitored by US intelligence.
Pence said in January that Flynn denied those calls involved sanctions placed on Russia by the Obama administration in response to its election meddling.
Obama warned Trump
Yates' comments came after former Obama officials revealed that the outgoing president himself firmly warned Trump against naming Flynn as national security advisor, just two days after the November 8 election.
Obama had cautioned against Flynn, whom he fired in 2014 as head of the defense intelligence agency, due to his poor record in administration and personnel management.
Yates' testimony returned the spotlight to the simmering controversy over Russia's meddling in last year's US election.
Known as a tough and independent prosecutor, Yates has been a target of Trump's ire since her refusal in January to support his controversial immigration ban on nationals from several Muslim-majority nations -- for which he fired her.
Also testifying Monday, former Director of National Intelligence stressed that Russia's interference in last year's election is "a clarion call for vigilance and action against a threat to the very foundations of our democratic political system."
"I believe they're now emboldened to continue such activities in the future, both here and around the world, and to do so even more intensely," he said.
Trump has repeatedly branded the issue of Russian interference "fake news" despite Clapper and other leaders of the US intelligence community concluding that President Vladimir Putin himself was behind the meddling.
Probes by several congressional committees have been bogged down for weeks amid accusations by Democrats that Republicans have stalled progress to protect the White House.
Earlier in the day Trump shot off a series of pre-emptive Twitter strikes, accusing Obama of enabling Flynn, and assailing Yates for allegedly leaking classified information.
"General Flynn was given the highest security clearance by the Obama Administration," he said.
"Ask Sally Yates, under oath, if she knows how classified information got into the newspapers soon after she explained it to W.H. Counsel."
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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