NORTH WEBSTER — U.S. Sen. Jim Banks touched on three main points in his keynote address Saturday at the Kosciusko County Republican Party Lincoln Day Dinner - America 250, the election of Max Engling as Indiana’s next secretary of state and the SAVE America Act.

“The first thing I want to talk about is America 250 because I think this sums up where we are today,” he said. “What I find when I go to Washington every week is, you’re a Republican or a Democrat, but at the end of the day you either believe one of two things, and I think this sums up where we are in American politics today.”

Banks said you either believe on America’s 250th birthday the United States is the “greatest country in the history of the world” and that America 250 is worth celebrating, or “you don’t believe this is the greatest country in history, and today I think, ladies and gentlemen, that sums up the difference between us and them, and I see it on Capitol Hill.”

Last Tuesday, Banks said America saw that difference in a “really big way that makes it more clear what’s at stake than I think maybe in politics than we’ve ever seen it before.” He was referring to “the new crop of Socialist, Communist Democrats that won in New York.”

Darializa Avila Chevalier beat incumbent Democrat Adriano Espaillat for the 13th District. Claire Valdez won her primary in the 7th District, and Brad Lander won his in the 10th.

“It’s not just three of them. This is the wing of the National Democrat Party that has taken over their party. I’m telling you that because I see it firsthand on the floor of the United States Senate. When I was in the House just five years ago ... the Progressive caucus in the House of Representatives was made up of six representatives,” Banks said.

“Today that caucus is made up of over half of the entire Democrat caucus in the House of Representatives. And in the Senate, you see these crazy, lunatic Democrats getting nominated in these states like the Nazi-tattooed candidate in Maine. Just north of us in Michigan you have (Abdul) El-Sayed, who is a radical, radical Democrat with a dangerous anti-American ideology that’s likely to be nominated.”

The three winners in New York last week are “guaranteed” to go to Washington, D.C., after winning their districts in November, Banks said before reading a little bit of information about each of them.

On Chevalier’s website, Banks said she talks about being a prison abolitionist. He noted that Republicans support the police and law enforcement. “This particular Democrat doesn’t. She thinks that prisons are racist, they’re unnecessary, we should release violent criminals and just put them on the streets because that’s what this wing of the Democratic Party believes. She also believes in abolishing ICE (Immigration and Customs Enforcement),” Banks said, adding he fully supports ICE officers.

Valdez won an open seat in Queens. Banks said Valdez says on her website she is for “granting citizenship and voting rights to illegal aliens who were deported. That’s one of her top campaign promises. She wants to nationalize the airline industry - can you imagine how awful the airlines would be if you put like the BMV in charge of our airline industry? It would be a disaster.”

Banks said Valdez also advocates for using taxpayer funds for all transgender treatments and surgeries, and she wants to completely abolish private health insurance.

Lander unseated another Democrat in West Brooklyn, Banks stated. Lander supports abolishing ICE, wants to forgive $2 trillion in student loans and expand the U.S. Supreme Court.

“So, you get the point, right? These are anti-American Democrats who have taken over the Democrat Party,” Banks said.

He talked about how his dad formerly was a Democrat and how President Donald Trump made the GOP the party of the working-class voters.

“We want our party to be that, to reflect that,” Banks said. “... Let me tell you, friends. This is not my dad’s Democrat Party. This is not my grandpa’s Democratic Party. This is a radical, anti-American Democrat Party who fundamentally wants to flip America upside down and change it. And we can’t let them do that, but these are the Democrats who have taken over the party. That’s what they believe in today.”

Only 29% of Democrats today say they’re proud to be an American, according to recent polling, Banks pointed out.
“So I want all of you to think about that as we celebrate America 250, because I know all of you agree with me that this country is great. This country is the greatest country in the history of the world,” Banks said. “... I would say that we’re on the right side of history. This is a great country.”

Transitioning to what he called the “most important race that we’ve had in Indiana in 20 years,” Banks then talked about the secretary of state race “that is the top of the ballot.”

Engling, who previously worked in Banks’ office, secured the Republican nomination at the Republican convention on June 29, beating out incumbent Diego Morales and two others. In the November general election, Engling goes up against Democrat Beau Bayh, Libertarian Lauri Shillings and former Republican Indianapolis Mayor Greg Ballard, who is seeking the office as an independent.

Banks said, “I think we have become way too darn complacent as Republicans because we’re used to the (state Rep.) Dave Abbott and the Republican leadership that we’ve had in this state for a generation. I feel like we’ve loosened up a little bit and the Democrats know it, too. That’s why the Democrats just nominated Beau Bayh, the third iteration of the Bayh family.

“This is a kid who, of no fault of his own, moved to the Swamp when he was 3 years old with his dad when he became a senator. His dad, Evan Bayh, who was the governor for eight years, then became a United States senator. This is a guy (Beau) who went ... to the most elite prep school in America in Washington, D.C., that cost more every single year than my dad ever made in his life, and that’s the type of prep school that he went to.”

Banks said after that, Beau didn’t move to Indiana but went to Harvard University. Banks said Beau left Indiana at age 3, was born with a “silver spoon” in his mouth and just moved back to Indiana a year ago.

“Why? To run for secretary of state because he’s the Democrats’ next best hope to try to rehabilitate the Democrat Party in Indiana. He’s got the famous last name, he’s got all the Wall Street and Swampy connections from his dad and his grandpa, being senators long ago from this state,” Banks said. 

“Why are the Democrats so interested in winning the secretary of state’s race? Why didn’t they nominate someone better to take on governor or senator or try to get this kid to run for Congress? I’ll tell you why.”

Banks suggested the Democrats care about the Indiana secretary of state race because it’s the office that is the “tip of the spear in Indiana to keep our elections safe and secure. To keep illegals from voting in our elections. To make sure that we make it as impossible as we can to stop those who aren’t who they say they are that show up to the ballots to vote.”

He called Beau the Democrats’ “Trojan Horse” to come to Indiana to run for secretary of state so the Democrats can get a foothold in the state.

Engling is the Republican Party’s best foot forward to take on Beau, Banks said.

Banks also wrapped up his approximately 20-minute address by saying Trump is right that the SAVE America Act needs to be passed. This bill requires individuals to provide documentary proof of U.S. citizenship when registering to vote, and requires photo identification to vote, in federal elections, according to a brief synopsis on congress.gov.

“I stand with President Trump. We’ve got to do whatever we need to do to pass the SAVE America Act to secure our elections because we know what the Democrats do when they get in charge - they lie, steal and cheat and they do it in elections,” he said.

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As Indiana Secretary of State Diego Morales faces mounting criticism and political pressure, newly obtained state records raise further questions about a recent payment to a software contractor and nearly half a million dollars in staff salary increases.

The records obtained by the Indiana Capital Chronicle show Morales’ office on May 6 paid $90,000 to Maverick Quantum Inc., an artificial intelligence development and software company, from Indiana’s Securities Restitution Fund — an account meant to compensate victims of securities fraud.

The payment appears to be the only vendor disbursement made from the fund since at least 2020, according to state records reviewed by the Capital Chronicle. Previous payments during that period went to individual claimants receiving restitution assistance.

The disbursement came just weeks after the Secretary of State’s office signed a contract amendment extending and expanding an existing agreement with Maverick Quantum. The Texas-based company’s original no-bid contract, signed Jan. 31, 2025, carried a maximum value of $1.15 million. An amendment signed last month added roughly $1.368 million.

Separately, salary data provided by the State Budget Agency shows Morales’ office approved $493,359 in annualized raises across 79 employees in August 2025, just two months after lawmakers questioned the office’s spending during a tense State Budget Committee hearing.

The Secretary of State’s office defended both decisions, telling the Capital Chronicle the restitution fund payment represented only 4% of the IT development cost and platform license tied to a broader Securities Division modernization project. Officials said the salary adjustments were based on state compensation studies, employee performance evaluations and available agency reserves.

Morales is seeking renomination at the Indiana Republican Party’s June 20 convention, where delegates will decide whether he will be the GOP’s secretary of state candidate. But his path has grown more uncertain in the past two weeks after several prominent Indiana Republicans — including U.S. Sen. Jim Banks and Attorney General Todd Rokita — withdrew their support.

Restitution fund payment

Indiana created the Securities Restitution Fund in 2010 to provide partial reimbursement to victims of securities law violations.

Under state law, money in the fund is continually appropriated for three purposes: awarding restitution assistance to claimants, paying expenses incurred in administering the program and making awards to informants.

The fund typically makes multiple restitution payments each year to individual claimants — including more than two dozen claim payments totaling about $253,000 during fiscal year 2025. But so far in fiscal year 2026, four claims totaling roughly $39,000 have been paid alongside the single $90,000 vendor payment to Maverick Quantum.

The office said it also received an “unrecorded number” of inquiries and applications “assessed as being ineligible” that were not formally processed or maintained.

State Budget Director Chad Ranney, an appointee of Gov. Mike Braun, said the fund currently carries a cash balance of $927,799, though only $800,001 was made available for use after the Secretary of State’s office sought and received a budget augmentation last year.

“Basically, we have … about enough to pay the number of claims we historically receive in four to five years’ time, not counting additional revenue that accumulates in the fund,” Secretary of State Chief Legal Counsel Jerry Bonnet told the Capital Chronicle.

Morales’ office told the budget committee in a 2025 letter that at least 85% of the fund would remain available for restitution payments, with no more than 15% used for administrative expenses such as maintaining the online claims system and processing claims.

That 15% cap allows up to $120,000 in administrative spending under the office’s requested $800,000 augmentation.

In a separate letter to the budget committee last month, Morales’ office requested the same $800,000 augmentation for fiscal year 2027, including a proposed $50,000 allocation for “claims administration IT system support” and $750,000 for “payment of approved claims (if any).”

But invoices do not clearly identify the specific work covered by the payment.

While a 90-page statement of work obtained by the Capital Chronicle references “restitution fund” as one of up to 16 portal workflows slated for modernization, the publicly posted contract documents on the Secretary of State’s website do not include anything related to the restitution fund.

Office spokesperson Lindsey Eaton said the payment to Maverick Quantum represented “approximately 4% of the IT development cost and platform license” associated with an ongoing three-year modernization of the Securities Division’s technology systems. She said the updated platform will support restitution claims processing while also enhancing the division’s ability to investigate securities fraud, recover losses and educate investors.

“The office determined that subject to sufficient availability of funds to pay claims, it would be fiscally appropriate and allowable to allocate operational expenses … across related department funds,” Eaton said.

A contract amendment signed April 14 between the Secretary of State’s office and Maverick Quantum expanded an existing agreement for AI development and software modernization work. The broader contract scope is tied to document migration, search portal development and artificial intelligence chatbot services for Secretary of State systems.

The contract amendment increased the agreement’s total potential value by approximately $1.368 million, according to records.

Maverick Quantum received $1.1 million in state funds during fiscal year 2025 and has received $340,000 so far in fiscal year 2026, including the $90,000 restitution fund payment.

Four restitution claim payments totaling $39,603 have also been made during fiscal year 2026, bringing total Securities Restitution Fund disbursements this fiscal year to $129,603.

The Maverick Quantum agreements bear signatures only from Bonnet and company CEO Vamshi Vaddiraja.

Indiana law generally requires state agency contracts to receive approval from the Indiana Department of Administration commissioner, the state budget director and the attorney general, or their delegated designees.

State code further provides that expenditures incurred in violation of those requirements are void and that payments made under void contracts may be deemed illegal.

The Secretary of State’s office maintains that those requirements do not apply in the same manner to separately elected constitutional offices.

“The Secretary of State’s office is functionally separate from state executive agencies under administration of the governor or other state officials,” Eaton said, adding that the office collaborates with state agencies on budgeting and contract development but that its contracting authority “is not dependent on authorization from other state officials or agencies.”

Donor ties

Indiana campaign finance records show Vaddiraja has donated $75,000 to Indiana political campaigns since 2024, including $55,000 to Morales’ campaign committee and $20,000 to Gov. Mike Braun’s campaign. The most recent contribution — a $15,000 donation to Diego for Indiana — was made Dec. 22, 2025.

Earlier reporting revealed Morales’ office awarded millions of dollars in no-bid contracts to campaign donors, prompting lawmakers to scrutinize procurement practices and eventually make changes to state contracting transparency requirements.

The original Maverick Quantum contract, awarded Jan. 31, 2025, was not competitively bid.

Unlike most executive branch agencies and statewide offices, however, Morales’ office still does not post contracts through the state’s centralized transparency portal.

A no-bid legal services contract executed by Lt. Gov. Micah Beckwith’s office in 2025, for example, authorized up to $150,000 in payments to Noblesville-based Adler Attorneys for general counsel and consulting services.

Although the agreement drew its own scrutiny because of the firm’s ties to Beckwith’s church network, the contract and a subsequent amendment were both signed by all required state officials and posted to the Indiana Transparency Portal.

Raises followed budget committee concerns

Additional records show that Morales approved substantial salary increases across his office in August 2025 — at a time when other state employees have received no raises two years in a row.

The raises increased total annual payroll to $6,196,414.

Most employees — 62 of 79 — received 6% raises. But other increases were significantly larger.

Ten employees received 12% raises. Other raises included increases of 16.7%, 20% and 24%, while two senior staffers — Kegan Prentice and Elina Kupce — received promotion-related raises of 27.3% and 28%, respectively.

Kupce, Morales’ former chief of staff, has since become the focus of separate controversy after records revealed she had improperly registered to vote as a noncitizen years before joining the office in 2023. The registration was canceled in 2013, and she never cast a ballot.

Prentice is the office’s legislative director and was Morales’ 2022 campaign manager.

The raises followed a June 2025 letter from Morales to lawmakers in which he pledged fiscal restraint amid what he described as the state’s “adverse fiscal climate.”

That letter, obtained by the Capital Chronicle, said the office would freeze all but critically necessary hiring, identify budget cuts and adhere to “the spirit and requirements for public bid contracting and open procurement.”

The office also told lawmakers it expected “virtually flat staffing levels” and had identified more than $2 million in planned spending reductions.

When Morales appeared before the State Budget Committee later that month, lawmakers pressed him on whether those cost-cutting commitments would preclude significant staff raises.

Bonnet acknowledged during that hearing that the office would be “looking for ways to make sure that we’re still fair with employees.”

Sen. Fady Qaddoura, D-Indianapolis, said at the time that he supported “investing in staff” but cautioned against “abnormal” or “out of the ordinary” pay increases that did not “align with the rest of the state.”

The Secretary of State’s office said the raises were largely calculated using the state’s 2022 employee compensation study, civil service salary grade benchmarks, manager performance evaluations and available fiscal reserves.

Eaton also noted that the office had initially sought funding for a 7.5% agencywide salary increase in its 2024 budget request, but that proposal was ultimately removed when lawmakers reduced the office’s biennial budget by more than 10%.

“The office believes its salaries are compatible and consistent with the state enterprise and other agencies with comparable responsibilities,” Eaton said. “The office has not received push back from other state agencies on the salary component of its bi-annual budget.”

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The Indiana Capital Chronicle is an independent, nonprofit news organization dedicated to giving Hoosiers a comprehensive look inside state government, policy and elections. The site combines daily coverage with in-depth scrutiny, political awareness and insightful commentary.

You can read the original version of the story here.

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WARSAW — Indiana Secretary of State Diego Morales on Thursday lost the support of key Indiana Republican allies as U.S. Senator Jim Banks and Attorney General Todd Rokita declared they no longer believe he is the party's strongest nominee for November. 

But Morales, showing no signs of backing down, says state convention delegates and not party insiders should decide the Republican nominee.

Banks, who endorsed Morales for reelection in March and previously called him a tireless advocate for Hoosier values, on Thursday endorsed Max Engling, an advisor in his Senate office. 

Banks said the change of heart comes after Morales lied to him about hiring a noncitizen as his chief of staff who was illegally registered to vote, according to the Indiana Capital Chronicle.

Kosciusko County Republican Chair Mike Ragan quickly reposted the joint statement from Banks and Rokita on Facebook. 

“I was concerned about it, and I was hoping that something like this would happen, so I was very pleased when I read about it and heard about it,” Ragan said in an interview with News Now Warsaw Thirsday afternoon.

Ragan describes Engling as popular and sharp and "operates above board in everything he

He said he thinks Englin will be a strong candidate when GOP delegates meet on June 20 in Fort Wayne for the party's nominating convention.

Thursday marked the filing deadline for GOP candidates. Party officials confirmed that Morales and Max Engling — a senior adviser and regional director in Banks’ Senate office — as well as Knox County Clerk David Shelton and conservative activist Jamie Reitenour were eligible, Indiana Capital Chronicle reported.

Area resident Brian Smith, who chairs the Democratic Party's Second Congressional District, said the decision by GOP leaders comes "four years too late," considering the number of controversies Morales has faced. 

Morales has been dogged by several controversies, ranging from the use of expensive vehicles to allegations of employing family members, as well as his penchant for international travel.

"The level of corruption and just straight-up hypocrisy is mind-boggling,” Smith said.

He said Republicans came to realize Morales would struggle if he faced Democrat Beau Bayh in the general election.

Bayh is promising to clean up the office and investigate some of Morales' activities while in office.

“The very first thing he will do is … a true independent audit of the agency so we can just understand the level of corruption that Diego Morales conducted for the past four years,” Smith said.

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By Tom Davies
Indiana Capital Chronicle

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A traditionally humdrum meeting detailing motor vehicle issues took a turn Wednesday when Indiana Secretary of State Diego Morales spent nearly 15 minutes blasting critical press coverage, repeating the phrase “fake news” a dozen times during what’s typically a brief housekeeping segment.

During the Motor Vehicle Advisory Board meeting, Morales launched into a wide-ranging

monologue defending his record, touting trade delegation meetings and visits to county fairs.

“Don’t pay attention to the fake news,” Morales said. “It is time for someone like me to share what we have done.”

He specifically called out WIBC and The Indianapolis Star, accusing the news outlets of misrepresenting his work and accomplishments.

“I’m not going to let the fake news, the fake IndyStar, the fake WIBC, to define me,” Morales said. “They are fake news, and they deserve to be called out.”

Since taking office in 2023, Morales has faced a stream of criticism tied to his international travel, office spending and hiring decisions. Media reports have scrutinized international trips and the use of campaign money to purchase a personal vehicle.

The Indiana Capital Chronicle has additionally reported on multimillion-dollar no-bid contracts awarded by the office, as well as hundreds of thousands of dollars in spot bonuses approved by Morales.

One of his office’s duties is to oversee the state’s auto dealers. The advisory board weighs in on the contents of forms; methods and procedures for evaluation of the qualifications of applicants for licenses; licensure actions and investigations into unfair practices.

In his remarks, the Secretary of State denied using public dollars for international travel and said he personally footed the bill.

“No taxpayer money was used (for) all of this, because I don’t believe in that, unlike what the fake news says,” he said “I pay for it. I (put) my money where my mouth is.”

He also suggested that his engagement with foreign delegations was yielding tangible economic benefits, like car manufacturing jobs.

“When I went to downtown Chicago to the (Japanese) emperor’s birthday … they told me… ‘Indiana is our friend. We will be moving our Honda operations from Mexico to Indiana,’” he said.

“Yet the fake news said … ‘Diego Morales is at some guy’s birthday’ — when that ‘some guy’s birthday’ is moving their Honda operations here,” Morales continued.

He also praised President Donald Trump for implementing tariffs that influenced the move but took partial credit himself.

“I give him 99% because of his tariffs, but I take that 1%,” he said.

Morales also name-dropped visits to Germany — where he said he met with Volkswagen representatives — as well as trips to Taiwan and India.

Traditionally, economic trade and promotion of the state falls to other state agencies, such as the Indiana Economic Development Corporation or the Governor’s Office.

More than trade

The secretary of state also touted voter registration drives at county fairs, boasted about his office’s outreach efforts at the Indiana State Fair and his own energy level.

“Tell me who other statewide office holder has crisscrossed all 92 counties within three months. No one,” Morales said. “My work ethic is unmatched. You know who’s the crazy guy who arrives in the statehouse between five and 5:30 a.m.?”

He referenced a new “AutoCheck” tool developed with Experian and said his office is prioritizing consumers by giving them free access to used car information. State taxpayers are paying hundreds of thousands of dollars for the service.

He also said that under his leadership, the office has increased enforcement activity.

“Before I came into office, we were getting more than 1,000 complaints just in one year,” Morales said. “And do you know how many enforcement actions they took? Twenty-one. That is unacceptable.”

Morales further spoke of his leadership, global experience and disdain for criticism.

“You can hate me if you want to. I don’t care. I don’t care. I’m here to get the job done,” he said, emphasizing that he didn’t seek the statewide office seat “to be a puppet.”

“You have never had a secretary of state like me who has a vision, who has studied all over the world, who has different skills and talents to benefit Indiana,” Morales added.

“Let’s look at Diego Morales — his abilities, his skills and talents that he has,” he said. “And you know what? I don’t care if you tell me this bragging. … There is no substitute against hard work. So you know what, I’m fired up and I’m excited, I’m excited to take on the world.”

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Indiana Secretary of State Diego Morales, who went on an unannounced “economic development trip” in India and missed obligations back home, publicly shared a release about his time abroad on Thursday — but only after he returned.

A Thursday press release from the office emphasized, in bold, that the ten-day trip was privately funded and that “no agency or taxpayer funds were used.” The release didn’t include dates, saying only that Morales had “recently concluded” the visit.

“Visiting India is an invaluable opportunity to strengthen Indiana’s economic ties with one of the world’s fastest-growing economies. By fostering deeper partnerships, we can unlock new avenues for trade, innovation, and collaborations, ensuring that both Indiana and India continue to thrive on the international stage. I look forward to seeing the long-term impact of our discussions on Indiana’s economic growth and international influence,” Morales said in the release.

Posts on his social media earlier in the month include visits to local ice cream shops and videos of him meeting county-level public officials, but not India. The Thursday press release he tweeted is his first mention of India since October.

But Morales wasn’t present for a March 18 meeting before lawmakers to justify his budget request for the 2025 cycle. State Affairs Indiana reported that his deputy told lawmakers Morales was on an economic development trip. However, the absence was subject to bipartisan criticism.

At least one Indiana official demurred about the trip on Thursday when asked if it was appropriate.

House Minority Leader Phil GiaQuinta, on the other hand, poked fun at the trip and Morales’ absence.

“Well, I was told he was somewhere and thought he’d booked a flight back to Indiana and apparently didn’t type all the way and he went to India,” said the Fort Wayne Democrat.

And while he acknowledged that the agency had duties with regards to corporations, he decisively said, “No,” when asked if the officeholder should take economic development trips.

“I hear a lot of this talking out of both sides: We want to cut budgets, but we also want to allow folks to take trips to India. It’s pretty ridiculous,” GiaQuinta continued.

Tweets from others put Morales in India as early as March 20, when he apparently addressed an audience at the National Association of Software and Service Companies Global Conference in New Delhi about “forging international alliances for tech leadership.”

According to Morales’ press release, he also “promoted Indiana as an ideal base for North American industry” before the India Electronics & Computer Software Export Promotion Council INDIASOFT 2025 Conference.

Economic development doesn’t typically fall under the purview of the Office of the Secretary of State, which oversees processes like business licensing and elections. Instead, the Indiana Economic Development Corp. usually coordinates international trips for state officials, including a 2017 India visit for former Gov. Eric Holcomb.

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The Indiana Capital Chronicle is an independent, nonprofit news organization dedicated to giving Hoosiers a comprehensive look inside state government, policy and elections. The site combines daily coverage with in-depth scrutiny, political awareness and insightful commentary.

You can read the original version of the story here.

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Indiana Secretary of State employees on Tuesday reported getting a “suspicious” envelope containing a “powdery substance” — joining election officials in numerous states.

Local, state and federal authorities responded to the State Government Center to secure the immediate area, conduct tests and remove the contaminated mail, according to a news release.

Responding agencies included the Indiana Capital Police, Indiana State Police, State Fire Marshall, Indiana Department of Homeland Security, State and Post Office hazardous materials units, and the Federal Bureau of Investigations.

They determined — preliminarily — that the contents in the envelope were non-hazardous, per the release.

“We take every precaution to ensure the safety of our employees and the public. I want to especially thank members of my team; our law enforcement partners and other first responders for their swift and professional response,” Secretary of State Diego Morales said. “We are relieved that everyone is safe.”

Powdery packages were also delivered this week to election-related offices in at least a dozen states, The Associated Press reported: Connecticut, Iowa, Kansas, Kentucky, Massachusetts, Mississippi, Missouri, Nebraska, New York, Oklahoma, Tennessee and Wyoming.

Morales’ office said he had made county clerks aware of the situation.

Spokeswoman Lindsey Eaton also noted that, earlier this year, Morales hand-delivered and mailed instructions on spotting and handling suspicious email — plus, doses of Narcan nasal spray — to county clerks’ offices throughout the state.

She also highlighted recent regional election security and safety conferences for county election administrators, emergency management offices and local law enforcement agencies.

* * *

The Indiana Capital Chronicle is an independent, nonprofit news organization dedicated to giving Hoosiers a comprehensive look inside state government, policy and elections. The site combines daily coverage with in-depth scrutiny, political awareness and insightful commentary.

You can read the original version of the story here.

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The Indiana attorney general’s office filed the notice of appeal Friday with the Indiana Supreme Court on behalf of Secretary of State Diego Morales.

The filing came a day after a Marion County judge granted an injunction sought by John Rust, the former chair of the egg supplier Rose Acre Farms who is running to replace Sen. Mike Braun. Rust filed a lawsuit in September against Morales, the Indiana Election Commission and Jackson County Republican Party Chair Amanda Lowery to challenge the law and ensure the possibility of his place on the ballot.

Lowery, the county’s Republican Party chair, said in a July meeting with Rust that she would not certify him, the lawsuit said. Rust has said Lowery later cited his primary voting record.

In a November hearing, Rust said the law keeps legitimate candidates who have recently moved to Indiana or have switched political identifications from running for office.

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INDIANAPOLIS — Indiana Secretary of State Diego Morales has given a spot bonus to nearly every employee in his office this year — including a family member and his former campaign manager — for a total of more than $308,000.

New data obtained by the Indiana Capital Chronicle showed that just four of six offices led by elected officials awarded spot bonuses in 2023. But Morales’ spending far outpaces his peers and includes five $10,000 bonuses and two $12,000 bonuses.

Secretary of State Spokeswoman Lindsey Eaton said in a written statement to the Capital Chronicle that the office does not have a formal or written bonus salary payment policy.

Instead, Morales’ employee compensation policy is that any employee “who exemplifies the office’s stated purposes and values” — “Serve Hoosiers by being Welcoming, Responsive, Efficient, and Innovative” — will receive “fair, competitive, rewarding compensation, recognition, and opportunity for advancement.”

Eaton said the “constraints of the state’s finance, accounting, budget, and employee classification system” make bonus payments necessary, and that the agency’s ability to adjust salaries “is not always available or advisable.”

“There are cases where extraordinary employee performance merits ‘extraordinary’ compensation,” she continued. “Because salary setting for state employees is a somewhat bureaucratic and collaborative process between government agencies, there are instances where issuing a bonus is the most practical approach for interim employee compensation.”

Where did the $308,000 go?

Eighty bonuses have been doled out this year to 68 staffers in the Secretary of State’s office — an office with roughly 75 employees — ranging from $500 to $12,000, for an average of $4,540 per employee. Nearly a dozen employees received two bonuses from Morales within the 10 months scanned by the Capital Chronicle, and one got two in one month.

Excluding the $500 bonus, which was awarded before Morales was sworn into office on Jan. 10, the next-lowest bonus of $719 went to a part-time employee. The lowest bonus from Morales to a full-time employee was $2,500 — more than two times the maximum outlined in a non-binding state personnel guidance for agency bonuses.

The Attorney General’s Office, by comparison, has hundreds more employees at a total staff of 373, but has only issued $48,000 in bonuses this year. For that office, bonuses ranged from $500 to $3,000 and averaged $1,333 per bonus across 36 employees.

Attorney General Todd Rokita didn’t respond to a request for comment on the office’s spot bonus policy.

“It’s really shocking to me (and) it’s hard for me to get shocked by anything in government circles sometimes,” said Paul Helmke, the former mayor of Fort Wayne and a professor at Indiana University’s O’Neill School of Public and Environmental Affairs. “It raises questions: are you just rewarding your friends? Is this just some sort of slush fund that they’ve created? It just doesn’t make sense to me … This smacks of favoritism.”

Bonuses offset low compensation, office says

The majority of the bonuses from the Secretary of State’s office came during June, accounting for $238,500 or 77% of all awards. The state’s fiscal year ends on June 30th, which Eaton cited in her statement.

According to the office, the previous Secretary of State Holli Sullivan learned that the department’s salaries were “underpaid compared to those in comparable private sector employment.”

Without naming Sullivan, Eaton said Morales’ predecessor advised staff that “salaries would be reviewed and action taken.”

“The former Secretary of State raised the hopes and expectations of agency employees but did not act on the matter before leaving office … and did not request an appropriation increase for employee compensation,” Eaton said.

In January, Morales amended the budget submitted to legislators to include a 12.5% increase in employee salaries — but that meant employees wouldn’t see an increase until July at the earliest, according to the statement.

“It was in consideration of the October 2022 (State Personnel Department) State Employee compensation study, our employee’s raised, but unmet expectations for salary increases, and the (generally) high level of understanding and patience shown by employees of the new administration, that the Secretary approved the agency-wide of spot-bonus awards ($2,500 and $4,500),” Eaton said. “The agency viewed the June ‘23 bonus payments that stemmed from the (SPD) Compensation study basically as making good on promised, long-overdue compensation overlooked by a previous administration.”

The office declined to elaborate on awards to specific employees, though several high-ranking staffers have received more than $12,000 in bonuses so far this year — including $42,000 to four employees in the last two weeks.

“The office cites employee privacy concerns as the basis for not commenting on individual employee compensation,” Eaton noted.

Eaton was one of 11 employees to get two bonuses under Morales. Others included his brother-in-law Shawn Grady, auto dealer services co-director Kyle Bonick, Chief Legal Counsel Jerry Bonnet and Morales’ former campaign manager Kegan Prentice.

Bonick and Bonnet both received combined bonuses of $16,500 — the two highest individual awardees — while Grady and two other employees received a combined $12,500. Four of these five employees have salaries over $110,000, according to the state’s transparency portal.

Eaton and Prentice were on the lower end of awards with $5,500 each in two separate bonuses.

General guidance to agencies

State agencies under the executive branch  adhere to guidance from the State Personnel Department when it comes to spot bonuses, which dictates that such awards range from $100 to $1,000 to “recognize outstanding performance ‘on the spot.’”

Some of the state elected officials indicated they followed SPD guidelines for bonuses, including the Comptroller’s Office, which houses the state’s payroll data.

That office, led by Tera Klutz, was one of four agencies to award spot bonuses in 2023, spending $23,500 in awards to 24 employees. The office said the majority of bonuses — all of which were rewarded in the first pay period of January — were related to the statewide implementation of a new payroll and human resources system that launched in May and December of 2022.

The only other statewide office holder to use spot bonuses in 2023 was Gov. Eric Holcomb, who spent $3,250 on four separate bonuses ranging from $500 to $1,000.

The maximum spot bonus for the Attorney General’s office was $3,000, which six employees received.

“The Secretary of State’s office is an autonomous Constitutional Office, authorized to function independently of other state offices or agencies and policies under the direction and control of the Governor of the state.” Morales’ office said in its statement. “While the office typically cooperates with the administration of other state offices, it is free to establish and follow whatever policies it believes will best serve its Constitutional and statutory responsibilities,”

‘It’s at the whim of the boss’

To qualify for such bonuses, SPD says employees must be employed for a minimum of six months and be engaged in “exceptional performance which produced a measurable outcome,” though agencies have the ultimate discretion.

Examples of exceptional performance include: completing a significant project ahead of schedule with results which exceeded expectations, creating a solution to a problem and/or providing exceptional customer service, according to the employee handbook.

Helmke noted that no such program — which was reformed in 2022 — existed when he was mayor, but he said he recognized the value of it, considering the low pay of the public sector and competitiveness with the private sector.

The SPD guidelines indicated that a small award every few years would be appropriate, Helmke said, when someone went “above and beyond.” But using it too often or multiple times in one year diminished the ‘on-the-spot’ aspect.

“I don’t understand how you get multiple — you shouldn’t be getting it multiple times in a year. If you’re doing that, maybe you’re in the wrong job category and need a promotion,” Helmke said. “It’s great to get these bonuses every year but why not just build it into their pay at the start?”

Without an explicit process for rewarding bonuses, Helmke said it seemed to boil down to making the boss happy. When nearly all of the bonuses are clustered together — 68 awards in June, five in August and four in October — it’s no longer “exceptional performance.”

“Which makes it sound like it’s at the whim of the boss not — in any sense, really — earned for justified,” Helmke said. “I don’t mind an extra bonus (from) my taxpayer dollars to go to exceptional work. But it does bother me when it’s … a state elected official who throws around these taxpayer dollars whenever he or she feels like (they) want to reward somebody.”

For a government agency that might seek to punish bad actors in the future, it could feel hypocritical, Helmke said.

“Next time I see that they’re cracking down on businesses that are using funds improperly, it sort of raises the issue: are you using your funds properly?”

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LAGRANGE COUNTY -- Flexible Auto Sales is under investigation for scamming their customers by rolling back odometers.

The Indiana Secretary of State announced that their team is joining the Attorney General's investigation into the Shipshewana auto dealer owned by John Allen. They say he rolled back millions of miles on the odometers to vehicles sold to dozens of Hoosiers.

Agents from the Secretary of State working under the Auto Dealer Services Division have regulatory and enforcement authority over new and used car dealers and can suspend an auto dealer’s operating permit if laws are being violated.

Secretary of State Diego Morales said in a press release that any consumers should report suspicious dealers. "Our office will not tolerate auto dealers using unlawful tactics to take advantage of Hoosiers. We take these matters seriously and will work to make sure only legitimate auto dealers are doing business in our state."

Depending on the outcome of the investigation, Allen faces penalties that range from fines to suspending or revoking the dealer's operating license.

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