By Tommy Witherspoon

Tribune-Herald staff writer

While McLennan County District Attorney John Segrest’s office has not received the felony theft case against former Downtown Waco Inc. executive director Margaret Mills, Segrest said Monday that he will turn the matter over to the state attorney general’s office for potential prosecution.

Mills, 66, was arrested last week on first-degree felony charges that she embezzled at least $268,000 from the agency she led for almost two decades.

Although the Waco Police Department still is completing its investigation, Segrest announced that he will recuse his office from prosecuting the case because of his longtime association with the Mills family.

Rick Bostwick, one of Mills’ attorneys, said Monday that he appreciates the way officials are handling the case.

“Given the apparent insatiable tabloid appetite for this matter, we appreciate that there is evident progress on this case in the legal forum that has the duty for dealing with this matter, that they are doing so responsibly, and we look forward to its resolution,” Bostwick said.

Segrest’s father, Claude Segrest, and Margaret Mills’ husband, Coke Mills, practiced law together in Waco for many years. Also, Segrest and Coke Mills have been active together in local Democratic Party politics over the years.

“As the representative of the state of Texas in criminal matters, it is the responsibility of this office to prosecute where the facts support and justice demands such action,” Segrest wrote in a statement. “In the exercise of that power, we employ every legitimate means to try to bring about a just result while adhering to the highest ethical and professional standards. We do the right things for the right reasons, and the district attorney’s past history with the accused and her husband will not change that.”

Segrest said he will ask Attorney General Greg Abbott and the Texas attorney general’s criminal law enforcement division “to assume all investigative and prosecutorial duties” in the Mills case.

Sgt. Ryan Holt of the Waco Police Department said his agency still is working to complete its investigation.

“It is still an open case,” Holt said, declining to speculate when it might be forwarded to Segrest’s office.

Judge Matt Johnson of Waco’s 54th State District Court and Judge Ralph Strother of Waco’s 19th State District Court, in whose courts the Mills criminal case could land, said Monday that they were not prepared to make the call about whether they would preside over the matter.

Segrest said in his statement that as lawyers, prosecutors are “constantly admonished to avoid not only impropriety but also the appearance of impropriety.”

“Even the mere appearance could create doubts about the judicial system and cause a decrease of public confidence in the criminal justice process,” he said.

Segrest said his office will continue to cooperate with the police department’s investigation, including evaluating the evidence, issuing grand jury subpoenas for additional information and answering questions.

A special prosecutor will not be named until Segrest’s office and “financial experts trained in the detection, assessment and prosecution of complex ‘white-collar’ cases” have reviewed the evidence, Segrest said.

“At no point in this process will any member of this office participate in post-investigation issues,” he wrote. “We will not engage in any decision to seek formal charges, in any preparation and presentation at trial or before a grand jury, in any discussion concerning a proper disposition, in any court appearance and any other matter of a prosecutorial nature. Those will be exclusively in the purview of the special prosecutor.”

Mills, praised and widely regarded for her efforts to lead downtown revitalization, remains free on $25,000 bail. She faces up to life in prison on the felony theft charges. She is suspected of funneling funds and membership dues intended for use by Downtown Waco Inc. into her personal bank account.

Police investigators, who continue to dig into agency and Mills’ records, say the amount could reach $500,000.

twitherspoon@wacotrib.com

757-5737