Newly obtained state records in Indiana have raised questions about financial decisions inside the office of Secretary of State Diego Morales, including a $90,000 payment from a victim restitution fund to a private contractor linked to political donations, along with nearly half a million dollars in staff salary increases.
According to records reviewed by the Indiana Capital Chronicle, the Secretary of State’s office on May 6 paid $90,000 to Maverick Quantum Inc., an AI and software company, using Indiana’s Securities Restitution Fund. The fund is intended primarily to compensate victims of securities fraud, and the payment appears to be the only vendor disbursement from the account since at least 2020, when most payouts went directly to individual claimants.
The payment came shortly after the office expanded a no-bid contract with Maverick Quantum, originally signed in January 2025 with a potential value of $1.15 million. A later amendment added about $1.368 million more for work tied to IT modernization, including AI tools, document systems, and portal development.
Separately, records show the office approved $493,359 in annualized salary increases for 79 employees in August 2025. Most employees received 6% raises, while others received increases ranging from 12% to as high as 28%, often tied to promotions or performance reviews. The total annual payroll rose to about $6.2 million.
The office defended both the contract payment and salary increases, saying the restitution fund payment represented a small portion of a broader IT modernization effort and that the raises were based on state compensation benchmarks, performance evaluations, and available agency reserves.
The Securities Restitution Fund, created in 2010, is meant to provide partial reimbursement to victims of securities violations and also cover limited administrative costs. State records show the fund currently holds about $927,799, though only $800,001 was made available for use after a prior budget adjustment. In fiscal year 2026 so far, the fund has paid out roughly $39,603 to claimants, alongside the $90,000 vendor payment.
Officials in the Secretary of State’s office said the payment was tied to modernization work that also supports claims processing, fraud investigation tools, and investor services. They also said the contract structure allows administrative costs to be allocated across related funds when sufficient balances exist.
The report also notes that Maverick Quantum’s CEO has contributed $75,000 to Indiana political campaigns since 2024, including $55,000 to Morales’ campaign committee, raising additional scrutiny over donor relationships and procurement practices.
Critics have pointed to concerns over no-bid contracting, transparency, and whether proper approval procedures were followed. The office argues that its contracting authority is separate from other state executive agencies and that its agreements comply with applicable rules for elected constitutional offices.
The raises came shortly after lawmakers questioned the office’s spending during a budget hearing, where Morales had previously pledged fiscal restraint and identified planned cost reductions. Officials say the salary adjustments were consistent with state compensation studies and enterprise benchmarks, though some lawmakers had warned against unusually large increases.
The controversy adds to ongoing political pressure on Morales, who is also facing internal party challenges ahead of the Indiana Republican Party convention.
