The following report was written by Indiana journalists Barb Berggoetz and Steve Hinnefeld for The Indiana Citizen.
November 3, 2022
Indiana’s hotly contested and closely watched campaign for secretary of state has drawn more than $2 million in contributions – far more than recent contests for the sometimes overlooked state office.
Republican Diego Morales has brought in over $1.2 million, much of it in five- and six-figure contributions from businesses and the state GOP. The amount is comparable to the total raised by all candidates in each of the past two campaigns for the office, $1.3 million in 2014 and $1.4 million in 2018. Democrat Destiny Wells, buoyed by many small-dollar donors and generous union support, has raised nearly $800,000, with Libertarian Jeffrey Maurer far behind with slightly more than $70,000.
Julia Vaughn, policy director of Common Cause Indiana, said it’s not surprising Morales has raised the most money. Republicans have not lost a statewide election since 2012 and hold supermajorities in both legislative chambers.
“Money follows power,’’ she said, “and they certainly have most of it in the state.”
The figures are compiled from campaign finance reports, including 2022 fourth-quarter reports with contributions through Oct. 24 and additional donations of $1,000 or more posted the subsequent week. The most recent report was filed Nov. 1, a week before the election. Final tallies for the entire campaign period will be posted later.
“What’s unusual, I suppose, is the amount that Wells will have raised,” added Marjorie Hershey, professor emeritus of political science at Indiana University Bloomington and an expert in political campaigns and elections.
In fact, Wells has kept pace with Morales in 2022. From Jan. 1 through Oct. 24, she generated over $742,000 compared to his $623,000. The Indiana Republican Party has spent big on television ad buys for Morales in the past week, erasing that financial advantage.
A Democrat has not been elected to this office since 1990, when appointed incumbent Joseph Hogsett and his unsuccessful Republican challenger, then Indianapolis Mayor William Hudnut, had combined for more than $3 million in contributions by October. Adjusted for inflation, that would be nearly $7 million today.
The key question, Hershey said, is whether Wells has reached the fundraising threshold that will enable her to break through most people’s lack of awareness of state politics, especially for a down-ballot office.
“It’s just impossible to underestimate how much people care about politics in general,’’ she said, “much less the secretary of state race.”
The office has been in the spotlight, however, due to national attention on election integrity, voter access and so-called “election deniers.” In Indiana, the race has drawn interest due to controversies surrounding Morales and polling suggesting it is competitive. The Sabato’s Crystal Ball newsletter this week called the race a toss-up.
“Raising more than $2 million is an indication of how competitive the race is and how much attention is being placed on offices that are involved with the administration of elections,” said Andy Downs, director emeritus of the Mike Downs Center for Indiana Politics at Purdue University Fort Wayne.
“Breaking the $2 million barrier is surprising,” he added. “This may be the outlier year.”
Nationally, the office has become a battleground with numerous tight races, many in “purple” states, where Republican candidates have supported or currently espouse the false claim the 2020 presidential election was stolen from Donald Trump. In 40 states, including Indiana, the secretary of state oversees elections and influences potential changes in state election laws ultimately decided by the state legislature.
Candidates for secretary of state nationwide raised $56.2 million from January 2022 through mid-October, according to OpenSecrets, a Washington D.C.-based nonpartisan research group that tracks money in politics. The group said candidates, including Morales, who have questioned the legitimacy of the 2020 election had raised $7.2 million.
Morales has attracted not only more money than usual, but also more controversy, including allegations of past sexual misconduct which he denies; his early contention that the 2020 presidential election was a “scam;” his troubled employment history in the office of the secretary of state, questions about his military service and more recently, an Indianapolis Star report that in 2018, he might have voted in one county while residing in another, a felony under Indiana election law.
A Guatemalan immigrant who now owns an Indianapolis property management services and staffing business, he won the nomination over current Secretary of State Holli Sullivan in June at the GOP convention, but had started to amass campaign funds about 18 months before. He snagged major donations early from businesses, some Hispanic-owned, and later from numerous automobile dealerships – a business the secretary of state oversees – and from a variety of other businesses. He benefited, too, from major in-kind donations from his party.
Asked about campaign fundraising and spending, Morales provided the following statement: “I am extremely grateful for the generous donors who have supported my campaign. I am also very proud of my ability to successfully fundraise. As a legal immigrant who came to America with nothing, I am proof that hard work pays off. My grassroots approach and commitment to visit all 92 counties in the state – some multiple times – has also paid off.”
The Indiana State Republican Party has been able to shell out significant funds to back Morales, including on television ads that feature him and other statewide candidates, but its Democratic counterpart hasn’t made direct campaign contributions to Wells.
Morales’ campaign filings show the state GOP has donated over $266,000, most of it via in-kind contributions for advertising, and the Republican State Leadership Committee – Indiana PAC kicked in $10,000, all in October.
State party support for Morales includes a $110,350 contribution posted to the Indiana campaign finance website Oct. 26 – coincidentally, the same day that The Indianapolis Star published interviews with two unnamed women, former colleagues of Morales, who said he made inappropriate advances more than 15 years ago.
Luke Thomas, press secretary for the Indiana Republican Party, declined to comment on fundraising and spending for Morales, calling it a matter of “internal strategy.”
As a potential candidate, Morales didn’t waste any time making his case.
In a single month, December 2020, he raised over $200,000 from an assortment of businesses and individuals, including many who had not contributed to Indiana political campaigns. Three affiliated real estate businesses, Weston, Georgetown and Stanford property management, gave a total of $50,000 that month. Cornerstone PEO, a staffing company based in New Jersey, gave $25,000. A medical center and pharmacy at the same Indianapolis address gave $20,000. An Indianapolis janitorial supply company and two of its principals gave $14,000.
The Weston, Georgetown and Stanford property management companies are subsidiaries of Indianapolis-based developer Sojos Capital. Except when noted, businesses and individuals identified as donors did not reply to requests from The Indiana Citizen to discuss their support for candidates.
One school of thought, said Downs, formerly a political science professor at Purdue Fort Wayne, is that donors aren’t going to pony up big cash until after the party conventions nominate statewide candidates. But he conjectured that Morales got active early, visiting events around the state, with the idea that early money would shore up support at the convention.
“You go to the people you know, raising money to begin with,” Downs said. “There is always a list of people who have money and will give you money. In his case, the list would have been business contacts.”
In 2021, Morales raised an additional $275,000, ending the year with $432,450 on hand. His fundraising seemed to stall after he won the nomination but picked up dramatically in the third quarter of 2022.
Some contributions to Morales’ campaign reflect the responsibilities and oversight duties of the office he’s seeking. While the office’s role in overseeing elections has been the focus of this campaign, the office holder’s duties also include chartering new businesses, regulating the securities industry, registering trademarks, commissioning notaries public, and licensing motor vehicle dealerships, which generally support Republican candidates in Indiana.
Morales has been able to accumulate more than $120,000 from at least eight automobile dealerships, many in Fort Wayne. Some contributions are listed on state filing reports from the dealerships, such as $15,000 from Kelley Automotive in Fort Wayne and $10,000 from Mercedes Benz of Fort Wayne LLC. Others are from dealership owners, including $5,000 from Andrew Mohr of Indianapolis.
However, the political action committee of the Automobile Dealers Association of Indiana contributed $5,000 to Morales and $5,000 to Wells.
In recent years, dealers have pushed the state to restrict direct sales from auto manufacturers to consumers. In 2017, the General Assembly banned direct sales but made an exception for Tesla, which was already engaged in the practice.
Kevin Brinegar, president and CEO of the Indiana Chamber of Commerce, which has not endorsed or contributed to any of the candidates, said the business community wants the office to run smoothly and professionally. He credited Republican Connie Lawson, who was secretary of state from 2012 to 2021, with providing information and guidance for businesses trying to navigate the complex web of state requirements and services.
“The duties and responsibilities of the office are not partisan per se,” Brinegar said. “The business community would expect that would continue as it has in the past.”
Wells, an attorney and U.S. Army Reserve military intelligence officer, got a later start in fundraising, filing in the first quarter of 2022. Playing catch-up, she has gotten major financial support from many labor unions, which generally are loyal Democratic supporters.
Wells’ biggest individual donor is Ann M. Stack, an Indianapolis philanthropist, arts patron, backer of women’s causes, and well-known Democratic supporter who donated $62,500.
Wells has received contributions from about 10 county-level party organizations, ranging from several hundred to $4,000, and from the campaign committees of other Democrats, including former U.S. Congressman Baron Hill, Senate candidate Tom McDermott, former House speaker John Gregg and state Reps. Ed DeLaney, David Niezgodski and Robin Shackleford.
“We’ve raised a significant number of dollars,” said Lindsay Haake, communications director for Wells for Indiana, 11 days before the election. “We’ve actually been on TV now for two weeks and that’s kind of unprecedented for a secretary of state’s race.”
While recognizing a campaign can always use more funds, Haake said she is heartened by the fact that more than 3,500 of the total 4,600 individual donations are under $1,000. The average of all the individual donations is $161.20, she reported.
“What’s important about that,’’ she said, “is we’ve outraised Diego in individual donations by 10 to 1.”
“I think it’s a tremendous signal that Hoosiers are simply aware that democracy is on the ballot,” Haake added. “They see it as an investment so that their access to the ballot doesn’t change.”
The Indiana Democratic Party has supported Wells in ways other than direct donations, says party chair Mike Schmuhl, including major investments of time and organizing efforts to bring attention to her and other statewide candidates through media tours, volunteer recruitment, digital advertising and microsites to point out the “extremism” of some GOP candidates like Morales. One such site is diegonomorals.com.
He said the two parties structure campaigns differently, with the GOP making more direct contributions to candidates.
“A big reason for that is that they have more money,” said Schmuhl, who said he has made individual donor requests on Wells’ behalf. “I’ve been trying to close that gap by raising more money to build and run more effective programs to reach voters.”
The Indiana Republican Party raised over $3 million in 2022 through mid-October while the state Democratic Party raised less than $2 million.
Schmuhl said he believes the media tours conducted at 160 locations in 70 counties over the past 1 ½ years have helped local, county and statewide candidates like Wells meet voters, introduce themselves, answer questions and give media interviews.
Each tour, he said, has had a theme, including jobs, small towns and the party’s “contract with women.”
“In the absence of a huge multi-million dollar campaign, we’ve created that to help all candidates across the state,” stressed Schmuhl.
The party, he said, also has built a year-round organizing program, hiring people in different areas of the state to recruit volunteers to do phone banks, knock on doors and other efforts designed to help all candidates.
Contributions to Wells from a long list of labor unions’ political action committees totaled about $230,000. Support came from local and national unions representing electrical workers, building and construction trades, steelworkers, laborers, plumbers and pipefitters, joint labor management, steel metal workers, and others.
“We could not do this without labor,” said Haake. “Their fundraising has been critical and their hard work has been incredible, too.”
She said those funds have allowed the campaign to expand its message on TV and other platforms and reach places where it’s hard to knock on doors. Union members also have been active in conducting phone banks and canvassing neighborhoods, she added.
Ed Maher, communications director of Local 150 International Union of Operating Engineers, said the 4,500-member local is politically diverse and has a long history of supporting Democratic and Republican candidates.
But in this race, Maher said, the local supports Wells “because we think she is an intelligent and committed leader who will dedicate herself to doing the will of the people in a role that Hoosiers will interact with frequently.
“Diego Morales has a history of questionable judgment that, when coupled with an almost total lack of transparency, leaves us unconvinced that he is capable of representing all of Indiana’s residents,” Maher added.
Other sizable contributions to Wells came from the ReCenter Indiana Political Action Committee, which supports centrist candidates, $12,500; Better Indiana Political Action Committee, which backs progressives, $12,500; and the American Federation of Teachers Political Action Committee, $5,000.
Maurer, a development officer for Libertarian nonprofit group Students For Liberty, went into his campaign knowing he would be at a disadvantage financially. He has raised $70,041 by the fourth quarter reporting period. A major goal of Maurer’s is to bring in at least 10% of the total vote – the level set by the state to qualify third parties for primary elections.
As with most third-party candidates, Maurer has relied on a grassroots campaign and meeting people in person and at events, along with media coverage. “My campaign continues our advertising strategy on more than 50 radio stations, covering the state,” he said earlier this week.
His support has come from more than 200 individual donors, but no businesses. Nine individual donors gave more than $1,000, with Susan Martin of Valparaiso the largest donor at more than $5,000.
Maurer was critical of the concentration of the major parties on raising money. “If our votes count so much, why are we all so focused on dollars? If our elections were truly safe and accurate, why is there so much money raised and spent to sway them?”
He accused candidates of trying to “buy” their election.
“Why do we ridicule ‘rich’ sports teams for buying their victories,’’ he asked, “but refuse to see how Republicans and Democrats buy theirs?”
But does the candidate who raises the most money get the most votes? Not always.
“You don’t have to have the most money, but you have to have enough money,” said Downs, who now owns a professional consulting firm. “What the money does is help you get access to the resources to win an election.”
He called those resources “time, talent and treasures.” Candidates can still win with less money than opponents, he said, if they have more access to time and talent from plenty of campaign workers and supporters to wage a tough campaign reaching a lot of voters.
One case in point, he said, was the 2012 statewide race for superintendent of public instruction between Democrat Glenda Ritz and Republican Tony Bennett. Ritz, a long-time school librarian and political newcomer, upset incumbent Bennett, a better-known and financed candidate with strong Republican backing. She pulled in less than one-fifth of the money Bennett had, but she waged a vigorous grassroots campaign with strong support of the Indiana State Teachers Association and teachers statewide who disliked Bennett’s education policies.
“The best form of campaigning is face-to-face by the candidate,” said Downs. “The second best is face-to-face from an informed campaigner. Teachers had the time and talent to articulate her positions.”
Has Wells raised enough money to get across her “pro-democracy” message, as she calls it, and win over some Republican and independent voters needed to win?
“Maybe,’’ Downs replied,” but that’s hard to say.”
With today’s fractured media market, he explained, candidates don’t necessarily have to run a lot of television commercials.
Using new forms of communication, candidates can reach voters in alternative ways that cost less. If candidates get media coverage and raise awareness of their campaigns on social media platforms, viral messaging and videos, those measures also indicate whether campaigns are viable, he said.
Hershey, the IU scholar, said political fundraising matters less for incumbents and election favorites than for challengers and underdogs – in this case, Wells. They have to reach a fundraising threshold that will let them get their message to the voters, she said.
But it’s hard to know where that threshold is, with massive spending and wall-to-wall political ads drowning out any individual candidate’s message. OpenSecrets has estimated $9.3 billion will be spent on 2022 midterm elections nationwide.
“It’s not the spending that matters,’’ Hershey said,“ but breaking through the noise and getting people’s attention.”
The race just may not be on the radar of some Hoosiers.
“I think you have to be a pretty careful news watcher to know who the secretary of state candidates are until you go out to vote for them,” said Downs. “I don’t know that Morales’ name is that well-known, even though he’s gotten some bad press.”
Indiana’s system of campaign financing has long been a source of contention.
A study released this summer by the nonprofit Center for Integrity ranked Indiana dead last for campaign finance regulation among the 50 states and the District of Columbia. Its score was far behind South Dakota, which ranked next-to-last.
The study noted that Indiana puts no limits on campaign contributions by individuals, political parties and most political action committees. Contributions by corporations are restricted, but they can get around the limits by forming political action committees.
Any revisions to campaign finance laws would require action by the General Assembly, though the secretary of state could lobby for changes and take administrative steps to improve the efficiency and transparency of the system.
In responses to a candidate questionnaire distributed to Morales, Wells, and Maurer by The Indiana Citizen, Wells and Maurer said they would seek to strengthen campaign finance laws, while Morales suggested current laws are appropriate.
Maurer said he would seek to require disclosure of “dark money” independent political expenditures and work with the legislature to institute recall elections so elected officials can be voted out of office before their terms expire. “Elected officials must be responsive to the needs and priorities of all of their constituents, not just big donors and wealthy special interests.”
Wells said she would work with lawmakers to strengthen campaign finance laws and adopt innovative technology to make the state campaign finance database more user-friendly. “It is a matter of how we prioritize our efforts within the office,” she said.
Morales deferred to the legislature on campaign finance law issues. “Indiana’s campaign finance laws are fair and transparent for all parties involved,” he said.
Democratic Gov. Frank O’Bannon made campaign finance a priority after his election in 1996, Vaughn of Common Cause Indiana noted, but a bipartisan effort to strengthen the laws was largely blocked by legislative leaders of both major parties.
Along with few restrictions on campaign contributions, she added, Indiana doesn’t regulate independent political spending by groups that aren’t affiliated with candidates or parties.
“It’s always those Hoosiers for Mom and Apple Pie kind of groups,” she said. “You don’t know where the money for Hoosiers for Mom and Apple Pie comes from.”
In addition to independent spending, Vaughn said, a good place to start with campaign finance reform would be to require disclosure of the employers, not just the occupations, of people who make late, large contributions.
The massive spending and plethora of large donations by parties with a vested interest in state government, she added, point to the need for improving Indiana’s campaign finance laws.
“We need more limits here in Indiana, including options for public funding of elections and voluntary spending limits,” Vaughn said. “But it’s been difficult to get any conversations going about that.”
Barb Berggoetz is a freelance writer based in Bloomington. She was a longtime government, education and health reporter for The Indianapolis Star and other Midwest daily newspapers and formerly an adjunct instructor at The Media School at Indiana University Bloomington.
Steve Hinnefeld is a freelance writer based in Bloomington. He formerly was an adjunct instructor at the Media School at Indiana University, a media specialist at Indiana University and reporter for the Bloomington Herald-Times.
For more information: A very basic primer on Indiana campaign finance