Morales Faces New Questions Over Fund Payment, Staff Raises

Records reveal a $90K contractor payment and nearly $500K in raises amid scrutiny.

Newly obtained state records are raising additional questions about spending decisions made by Indiana Secretary of State Diego Morales as he seeks renomination at the Indiana Republican Party convention on June 20.

Records reviewed by the Indiana Capital Chronicle show Morales’ office paid $90,000 on May 6 to Maverick Quantum, a Texas-based artificial intelligence and software company, using money from Indiana’s Securities Restitution Fund. The fund was created to help compensate victims of securities fraud. According to state records, the payment appears to be the only vendor disbursement from the fund since at least 2020, with previous payments primarily going to individual claimants.

The payment came shortly after Morales’ office expanded Maverick Quantum’s no-bid contract. Originally valued at up to $1.15 million, the contract was increased by about $1.368 million through an amendment signed in April. The office said the $90,000 payment covered roughly 4% of technology development and licensing costs tied to a broader Securities Division modernization project that includes claims processing, fraud investigations and investor education tools.

Campaign finance records also show Maverick Quantum CEO Vamshi Vaddiraja has donated $75,000 to Indiana political campaigns since 2024, including $55,000 to Morales’ campaign committee.

Separately, records show Morales approved $493,359 in annualized salary increases for 79 employees in August 2025, raising the office’s total annual payroll to more than $6.1 million. Most employees received 6% raises, while others received increases ranging from 12% to 28%.

The raises came just months after Morales pledged fiscal restraint during budget discussions with lawmakers, promising hiring freezes, spending cuts and adherence to competitive contracting practices. Some legislators questioned whether significant pay increases aligned with those commitments.

The Secretary of State’s office defended the raises, saying they were based on the state’s 2022 compensation study, salary benchmarks, employee performance evaluations and available reserves. Officials also maintained that salaries are consistent with comparable state agencies.

The scrutiny comes as Morales faces growing political challenges, including the loss of support from prominent Republicans such as Jim Banks and Todd Rokita ahead of the GOP convention.