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FILE PHOTO: Special Counsel Robert Mueller departs after briefing members of the U.S. Senate on his investigation into potential collusion between Russia and the Trump campaign on Capitol Hill in Washington, DC, U.S., June 21, 2017. REUTERS/Joshua Roberts/File Photo

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WASHINGTON (Reuters) - A U.S. judge on Monday backed Special Counsel Robert Mueller in the federal Russia investigation, allowing a case to proceed against a Russian company accused of helping fund a propaganda operation to sway the 2016 presidential election in Donald Trump's favour.

Judge Dabney Friedrich, in an opinion filed in the U.S. District court for the District of Columbia, rejected an argument by the company, Concord Management and Consulting LLC, that Mueller was unlawfully appointed and lacked prosecutorial authority.

"By investigating and prosecuting Concord, the Special Counsel did not exceed his authority," Friedrich wrote in her opinion.

She also rejected the company's argument that Deputy Attorney General Rod Rosenstein, acting on behalf of Attorney General Jeff Sessions after his recusal, was out of bounds in bringing in Mueller to investigate the alleged Russian meddling.

Concord's lawyers, who did not immediately respond to a request for comment on Monday, had argued that Rosenstein violated the Appointments Clause of the U.S. Constitution in hiring Mueller in May 2017. Friedrich ruled that U.S. Supreme Court and circuit court rulings made clear Rosenstein did have statutory authority to bring in Mueller.

Prosecutors contend Concord is controlled by Evgeny Prigozhin, a businessman identified by Russian media as being close to Russian President Vladimir Putin and who U.S. officials have said has extensive ties to Russia’s military and political establishment.

The company is one of three entities, along with 13 Russian individuals, indicted by the special counsel's office in an alleged criminal and espionage conspiracy to tamper with the 2016 U.S. election, boost Trump and disparage his Democratic opponent, Hillary Clinton.

Russia has denied any involvement. Trump has said there was no collusion and blasted the investigation by Mueller, a fellow Republican, as a "witch hunt."

(Reporting by Tim Ahmann and Susan Heavey; Editing by Bill Trott)

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