Budget committee lobs questions at embattled Secretary of State Diego Morales

Secretary of State Diego Morales faced intense scrutiny from state lawmakers on Wednesday about his myriad of controversies while seeking additional funds for his office related to cybersecurity, election oversight and securities duties.

Legislators — both Democrat and Republican — asked him specifically about his spending on no-bid contracts and international travel, the latter of which has been criticized for mixing personal business with state duties.

“My work ethic is unmatched,” claimed Morales. “I’m going above and beyond the call of duty and we will continue to do so.”

Other Morales controversies mentioned in the Wednesday meeting include: purchasing a $90,000 car with taxpayer money from a campaign contributor and hiring his brother-in-law.

While in India to speak at two tech conferences in March, Morales missed a key budget meeting — a particular point of contention for lawmakers — and didn’t disclose the trip, or its funders, until later. Last month he went to Hungary on a “personal trip” paid for by a conservative group but also spoke as Indiana’s Secretary of State.

This week, he brought an entourage to ask for $10.2 million more, with Chief Legal Counsel Jerry Bonnet handling most technical questions.

Morales, whose office is not tasked with promoting the state abroad, said he believed he and other Hoosiers “need to showcase our state” and “talk about Indiana the same way people talk about other states” internationally.

“I want people to talk about Indiana. I want them to know Indiana is open for business,” said Morales. “… The media should be saying, ‘Thank you for your hard work. Thank you for promoting our state out there.’”

The Secretary of State’s Office registers both domestic and international companies operating in Indiana.

Sen. Fady Qaddoura said the missed budget meeting invited additional scrutiny, saying that such behavior in “most professional places” would impact an employee’s standing.

“I’m disappointed in your leadership and the way you’re leading your office,” said Qaddoura, D-Indianapolis.

“It’s unfortunate that I get judged for a couple of things here, but what about the rest?” Morales asked in defense.

“That’s the nature of being a public servant,” Qaddoura responded.

Morales also claimed he visited all 92 counties faster than other statewide office holders, which he cited as a reason why his office needed the luxury vehicle. He went on to say he’d put so many miles on it — “more than two secretaries of state combined” — that he’d been advised to retire the car for “safety” purposes.

“You have a vehicle that costs almost twice as much as the average salary of the average Hoosier,” said Sen. Chris Garten, R-Charlestown. “I think we need to pay attention to optics here…”

Morales also didn’t directly answer Garten’s question about campaign contributions related to the additional funds he sought from the committee, saying “lots of people” donate to his political efforts.

Where will the $10.2 million go?

“The office has taken significant measures to contribute to efforts to save money,” Morales said, putting those identified cuts at $2 million.

Morales cited newly enacted transparency requirements to publicize contracting, a rule which will apply to all agencies, as a reason his office needed additional dollars. In the past, the officeholder has taken criticism for his reliance on no-bid contracts, likely inspiring the legislation.

“I’m extremely disappointed that it took legislation to get us there,” quipped Garten.

That, combined with the budget agency directive to withhold 5% of funds, triggered the appearance before the budget committee, Morales said.

The bulk of the request, nearly $8.2 million, would go to the enhanced access fund, with most of the dollars earmarked for technology and security improvements.

Bonnet said a new chief information officer, who joined the office in 2023, assessed the IT systems and concluded that the “antiquated systems … (were) in danger of failing.” Improving that part of the office has created “a high spending curve” that Bonnet said would fall at the beginning of next year to between $4-5 million.

In response to another question from Garten about the office’s staffing, which he said had grown from 46 employees when Morales was elected in 2022 to 80 currently, Bonnet pointed to additional office duties related to elections and cybersecurity.

“We have a lot to do,” he said.

The additional dollars for the securities enforcement fund and the securities restitution fund will be $500,000 and $800,000, respectively. Finally, the appropriation to meet the Help America Vote Act will get $750,000 more dollars.

The Indiana Capital Chronicle is an independent, nonprofit news organization that covers state government, policy and elections.