Key Points:

• Arizona Department of Transportation accused of unfairly penalizing third party contractors

• The contractors say the crackdown came after a harsh 2023 auditor general report 

• A former ADOT employee alleges wrongful termination for pushing back against the crackdown

A now-terminated whistleblower in the Arizona Department of Transportation claims the department’s new audit and review procedure for third party Motor Vehicle Department providers has prompted an unfair and aggressive crackdown against private contractors.

Two third-party contractors, ASAP Title Services and TSI Title & Registration Services, which provide vehicle registration and title services allege their contracts to provide MVD services were suspended after leadership at ADOT put pressure on department staff to crack down on errors made by the third-party companies. The companies’ response, filed with ADOT’s executive hearing office, says the crackdown came in the wake of a harsh 2023 auditor general report that found MVD was not properly overseeing the third-party companies. 

The dispute focuses on changes to MVD’s model for quality control of third-party companies that are authorized to provide MVD services to reduce strain on ADOT facilities and employees. The MVD is responsible for reviewing the accuracy of a certain percentage of third-party transactions to ensure official documents and licenses aren’t issued to people who do not qualify for them.

Robert Smith, the former third party administrator at MVD, said in an August 2025 deposition obtained by the Arizona Capitol Times that the department changed the way it penalized errors made by third-party companies partially in response to the 2023 auditor general report.

In fact, Smith said the change in enforcement has resulted in a drastic increase in suspensions and terminations of third-party licenses. In his deposition, Smith confirmed the MVD saw the same amount of suspensions and revocations in an 18-month period between 2024 and 2025 as it saw between 2006 and 2023. 

“The way we function today has much to do with the audit findings of 2023,” Smith told attorneys.

The 2023 auditor general report found “MVD failed to ensure third parties consistently issued vehicle titles, driver licenses, and identification cards only to qualified and/or authorized individuals/entities, putting public safety at risk.”

Attorneys for ASAP and TSI argue ADOT overcorrected following the auditor general report in order to shift scrutiny from the department onto third party MVD providers. 

According to Smith’s deposition, MVD switched to a “non-tiered model” of ranking errors made by third-party companies in 2020. Under that model, minor errors like putting an incorrect hair color on a license would hold the same weight as more egregious errors like issuing a driver’s license to an unqualified driver. 

Additionally, third-party companies were previously given a chance to correct errors to avoid penalties, which include probation, suspension or the eventual termination of their contract with ADOT. According to Smith’s deposition and exhibits provided by ASAP and TSI, third-party companies are no longer allowed to correct errors in order to resolve penalties. 

Smith attributed the aggressive enforcement of penalties on third party companies to “the reaction of the Legislature, the governor, the Director Jennifer Toth, Deputy Director Wayne Webb” to the 2023 auditor general report. Additionally, Smith said ADOT leadership regularly disparaged the work of third-party companies and believed that work could be done electronically via kiosks at MVD locations. 

Smith sat for the deposition on Aug. 21 and was terminated by ADOT on Aug. 26, according to a termination letter obtained by the Arizona Capitol Times. Steve Elliott, a spokesman for the department, said ADOT cannot comment on personnel matters. 

“For nearly 20 years, I diligently served at ADOT MVD, spending my entire tenure overseeing third party providers and processors,” Smith said in a statement. “After I gave honest answers in a recent deposition regarding the targeting of Third Party Providers, I was summarily dismissed from the division with no explanation. I am consulting an employment attorney about my next steps.”

Smith told attorneys in his deposition that he had been suspended by ADOT leadership in 2024 for insubordination, which he believed was due to his resistance against taking more aggressive action against third-party companies.

“I feel making third parties aware of their errors and allowing them to correct moving forward is a better approach than simply immediately jumping on and penalizing,” Smith said in the deposition. 

MVD Director Eric Jorgensen, who Smith names in his deposition multiple times, resigned from ADOT in December as the department was gearing up for administrative hearings related to ASAP and TSI’s complaints. 

In a statement, ADOT Director Jennifer Toth said Jorgensen left the MVD after 20 years for an opportunity in the private sector. But Barrett Marson, a spokesman for several third-party providers, said in a statement that the departure raises eyebrows.

“Mr. Jorgensen’s sudden departure from MVD raises questions about how the division is mishandling third party operators, some of whom have been targeted for closure recently,” Marson said. “More transparency is needed to determine why MVD wants to shutter successful third-party operators.”

Elliott said any allegations that the department is attempting to eliminate third-party MVD providers is “provably false.”

“As a result of the Arizona Auditor General’s August 2023 audit, MVD requires all Authorized Third Party providers to participate in a quality assurance program,” Elliott said in an emailed statement. “As part of this program, in-house quality checks are reviewed and verified by MVD staff. Any Authorized Third Party provider that does not complete its reviews or address its errors will be subject to disciplinary action.” 

TSI presented its complaint at an administrative hearing on Jan. 12, and is currently awaiting a decision from the administrative law judge. ASAP is scheduled to present its argument on Feb. 10.