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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Indiana’s top elected officials will all see a significant pay bump in the next year just as lawmakers convene to craft a budget with little leeway for extra spending. At the very top, Gov. Eric Holcomb’s successor will become one of the highest paid governors in the nation while other offices will see raises between 44% and 66%.

Holcomb is term-limited and has three candidates vying to succeed him: Republican Mike Braun, Democrat Jennifer McCormick and Libertarian Donald Rainwater. Any new officeholder will seek to implement their own priorities after inauguration, but may find they have fewer resources to do so than previous administrations.

One other office getting a pay raise will be on the November ballot: the race for attorney general. Incumbent Republican Todd Rokita is running for reelection and faces a challenge from Democrat Destiny Wells.

The raises, drafted in the last few days of the 2023 budget process with no public discussion, were passed before two significant budget hits: a Medicaid shortfall of nearly $1 billion and shrinking reserves. Lawmakers are scheduled to convene in January to draft Indiana’s two-year budget.

About those pay raises

The final version of the budget included a pay raise for six of Indiana’s executive leaders: the governor, the lieutenant governor, the secretary of state, the attorney general, the state treasurer and the state comptroller.

The pay for those offices — along with legislators’ salaries — are statutorily defined as a percentage of the salary of an Indiana Supreme Court justice. Chief Justice Loretta Rush determines whether a pay raise is necessary and the Office of Management and Budget calculates the increase.

In this case, former State Budget Director Zac Jackson then analyzed the average salary increases over a comparable amount of time for state employees in the same income bracket, which excludes quasi-public agencies such as the Indiana Economic Development Corp.

Based on that determination, justices, judges and prosecutors in the state’s judicial system saw a 3% increase between the 2023 fiscal year and the 2024 fiscal year, the latter of which started on July 1.

By law, the governor’s salary will be equal to that of a justice at $221,024, a 65% increase from Holcomb’s salary of $133,684. Previously, lawmakers set the office’s salary at $95,000 in 2007, with raises every four years tied to increases for other state employees within that salary bracket.

That puts the governor’s salary among the highest in the nation. Indiana’s next governor will make more than all of its peers in neighboring states — Illinois’ executive leader, the next closest, will make $205,700 — and be within striking distance of much larger and wealthier states.

Raises across five other elected offices were calculated the same way as the governor’s after setting a base rate in 2007. For the lieutenant governor, the officeholder takes home $116,987 currently, a number that will jump 66% to $194,501 — or 88% of a justice’s salary — in the new year.

The state attorney general’s salary will be 83% of a justice’s salary, or $183,450. That is a 50% increase from the current salary of $122,184.

The offices of the treasurer, secretary of state and comptroller are all currently paid $101,594. Though called the auditor in the state constitution, the office changed its name to comptroller in 2023.

Those three offices will take home $145,876 in 2025, or 66% of a judge’s salary — a 44% increase.

Lastly, lawmakers have a base salary that is 18% of a judges salary, or $33,032. That pay will take effect in 2025 — though legislators earn more than the base salary, roughly $70,000 annually. The bulk of that extra pay comes from the $196 per diem paid to each legislator for each day in session. Lawmakers are also eligible for mileage reimbursements.

Lawmakers passed the increases on the last day of session, inserting the language in one of the last versions of the budget bill drafted after public hearings. In 2007, the last time the General Assembly weighed in on salaries, salaries for elected officials was passed in a separate, independently vetted bill.

Budgeting for the year ahead

Those pay bumps will go into effect in a different Indiana, however.

The week before it passed the budget bill and raises, legislators got a rosy forecast with an unexpected $1.5 billion in revenue. During the pandemic, the influx of federal funds and high sales tax revenues boosted state reserves to unprecedented levels, high enough to trigger two rounds of taxpayer refunds.

By December, the state’s economic fortunes had shifted.

Medicaid officials told lawmakers that the state program was short $984 million, largely due to high growth in demand for services for aging and disabled Hoosiers. Cost-saving measures enacted by leaders saved an estimated $300 million by barring parents of severely disabled children from working as attendant caregivers and by pausing Medicaid increases, among other actions.

Combined with a recent whistleblower lawsuit alleging that the agency overpaid insurers and hospitals by $700 million, Medicaid is sure to be a target of much debate in 2025.

Outside of those considerations, the pandemic era of explosive revenue growth has cooled to pre-pandemic norms. Typically, the state aims to keep reserve levels between 10-12.5% of expenditures and will hit a post-pandemic low of 10.4% in the 2025 fiscal year.

Top Republicans on key budget drafting committees have warned that maintaining current funding levels into the next two years “could well be a challenge,” in the words of House Ways and Means Chairman Rep. Jeff Thompson.

“… for K-12 and for Medicaid and all the programs to be able to do that — if you look at some of the projections and where we might land, that may not be easy,” Thompson said at a recent panel event. “I guess time will tell, based upon our revenue.”

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INDIANAPOLIS -- The state’s top elected officials would see a big pay raise under new salary language included in the latest budget proposal.

The increases, which would go into effect on Jan. 1, 2025, were not included in a presentation released by GOP legislative leaders Wednesday afternoon. But that document did include salary hikes for Indiana State Police troopers.

Under the addition, the state governor’s salary would be equal to that of an Indiana Supreme Court Justice — starting with Gov. Eric Holcomb’s successor. Holcomb is term-limited and cannot run again for his seat.

Holcomb currently makes $133,683 annually, compared to the justice’s pay of $198,513. That salary would increase by 48%.

The biggest increase would come to the Lieutenant Governor, whose salary would become 88% of a justice’s salary. Lt. Gov. Suzanne Crouch makes $108,819 and her successor would earn $174,691 – a 60% raise.

The office does lose its per diem under the proposal, however. Crouch has announced her intention to run for governor in the coming cycle.

The Attorney General would also see an increase of 45%, from $113,653 to $164,765, the latter of which is 83% of a justice’s salary. Incumbent Attorney General Todd Rokita has indicated that he will run for re-election in 2024.

The last three executive offices – the state auditor, state treasurer and secretary of state – would earn two-thirds of the justice’s salary, or $131,018. Currently, those offices earn $94,501 and could see a 39% raise.

The proposal is a significant bump that hasn’t been publicly vetted this session. Current law tying annual increases to those of other state employees remains.

Spokeswomen for House Speaker Todd Huston and Senate President Pro Tem Rodric Bray had no comment Wednesday night.

As part of the budget, the language is almost guaranteed to become law unless legislators make a last-minute amendment Thursday – though the General Assembly will return for the 2024 session before it takes effect.

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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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