This story was originally published by the Indiana Capital Chronicle.
By Casey Smith
Indiana Capital Chronicle
May 29, 2026
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.
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.
Morales lashes back over loss of Indiana secretary of state race support
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 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.”
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.
It was only after the General Assembly passed Senate Enrolled Act 5 in 2025 that the Secretary of State’s office began publicly posting contracting opportunities for at least 30 days before award and publishing contract documents on its website.
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.
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.”
The office believes its salaries are compatible and consistent with the state enterprise and other agencies with comparable responsibilities.
– Secretary of State spokesperson Lindsey Eaton
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.”
Indiana Capital Chronicle is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Indiana Capital Chronicle maintains editorial independence. Contact Editor Niki Kelly for questions: info@indianacapitalchronicle.com.
