Yates' comments at a Senate hearing were her first public remarks on the DOJ's controversial decision to drop charges against Flynn, who pleaded guilty to former special counsel Robert Mueller's team for lying to the FBI. The Justice Department cited the prior testimony of Yates -- who played a key role in alerting the White House about Flynn's calls with Russian ambassador to the US Sergey Kislyak -- in its decision to seek to dismiss Flynn's charges.
Yates clashed with Senate Judiciary Chairman Lindsey Graham over the FBI's interview of Flynn in January 2017. The South Carolina Republican charged that the FBI had moved to close its counterintelligence investigation into Flynn, before relying on allegations surrounding the Logan Act -- an obscure law that private citizens cannot interfere in foreign affairs -- but Yates argued that the interview was necessary to determine why Flynn had "neutered" then-President Barack Obama's administration sanctions against Russia in his calls with Kislyak.
Yates said that the recommendation to close the Flynn case came "before they knew about the conversations" between Flynn and Kislyak.
"They were absolutely material to a legitimate investigation," Yates said. "Interviewing General Flynn was right at the core of the FBI's investigation at this point to try to discern what are the ties between the Trump administration and the Russians."
Yates appeared Wednesday before the Senate Judiciary panel as part of the Republican-led committee probe into the FBI's 2016 investigation of Trump's campaign and Russia. Graham is scrutinizing the actions of the FBI and the Justice Department in its decision to open an investigation into members of Trump's team, as well as the appointment of Mueller in May 2017. Graham's investigation is jumping off a critical Justice Department inspector general report that found numerous problems with the FBI's surveillance warrant applications for former Trump campaign adviser Carter Page.
Yates, who was deputy attorney general in the Obama administration and briefly acting attorney general in the Trump administration, signed off on the first two Page applications, though not the final two that the Justice Department deemed invalid. She said Wednesday she would not have signed off on the investigation had she known there were errors in the applications.
Yates, who testified remotely, defended the decision to scrutinize Flynn in the face of Russia's interference in the 2016 election and Flynn's intercepted phone calls with Kislyak.
"General Flynn had essentially neutered the US government's message of deterrence," Yates said.
But Graham disputed Yates' explanation, arguing that the Obama administration targeted Flynn because "they hated his guts."
"The only problem is here you didn't like Flynn talking about changing the policy," Graham said. "What we're doing here is we're criminalizing policy differences."
Graham also focused on a January 5, 2017, meeting that Yates participated in, in which then-FBI Director James Comey and Obama discussed intercepted calls between Flynn and Kislyak, saying he was "stunned" that Yates was unaware of the matter at that point.
"How could it be that the No. 2 in the Department of Justice not know about an investigation of the incoming national security adviser and the President did?" Graham asked.
Yates has been critical of Comey's actions surrounding Flynn, but she defended that meeting, which also included former Vice President Joe Biden, saying that it was held for the President "to find out whether, based on the calls between Ambassador Kislyak and Flynn, the transition team needed to be careful about what it was sharing with General Flynn."
"During the meeting, the President, vice president and national security adviser did not in any way attempt to direct or influence any kind of investigation," Yates said.
Graham and congressional Republicans have accused the FBI of targeting the Trump campaign, and Trump and his allies have sought to undermine the validity of the Mueller investigation.
Trump weighed in on the hearing as it got underway Wednesday, accusing Yates on Twitter of being "part of the greatest political crime of the Century."
Graham charged Wednesday that the Obama administration was trying to use the Logan Act -- an obscure 200-year-old law that prevents private citizens from negotiating with foreign powers -- as a "sham reason to find out more about General Flynn," noting that Yates questioned that rationale.
Democrats have accused Republicans of running interference for Trump heading into the 2020 presidential campaign, in an attempt to rewrite the history of the Mueller investigation, which found no evidence of a criminal conspiracy but concluded those inside and associated with the Trump campaign welcomed and encouraged Russian activity they thought could help Trump win.
Yates played a key role in Flynn's firing as national security adviser in 2017, warning the White House about Flynn's calls with Kislyak, in which Flynn lied to senior members of the Trump administration -- and later the FBI -- that they discussed US sanctions.
In its motion to dismiss the charges against Flynn, the Justice Department wrote that Yates was "frustrated" by Comey's justifications for initially withholding the information from the White House, and the FBI's investigation "vacillating" between counterintelligence and criminal.
When Comey told her FBI agents were on their way to interview Flynn in January 2017, Yates said she was "flabbergasted" and that it should have been "coordinated with DOJ," the Justice Department wrote.
While Yates has been critical of Comey in the past, she hasn't said she objected to an investigation of Flynn. She previously testified that his lies to other members of the administration were serious and deserved the White House's attention, at the very least, and raised questions that investigators should have pursued.
This story has been updated with additional developments Wednesday.