In most ways, Kentucky's Women, Infants and Children Program is public: Federally funded and run by the state Cabinet for Health and Family Services, it provides $84 million a year for low-income families to buy nutritious food at about 750 state-approved stores, from big supermarket chains to tiny gas stations.
But the WIC Program suddenly turns private when those stores get in trouble for repeatedly overcharging customers, letting them buy liquor or cigarettes with their payments, selling expired food, not keeping the proper groceries on shelves or otherwise breaking the rules.
Citing a little-known federal regulation, Kentucky officials say they are not allowed to publicly identify the dozens of stores they have investigated in recent years or penalized, typically by temporarily disqualifying them from accepting WIC Program subsidies. At least 16 Kentucky stores appeared to get WIC Program disqualification letters from the cabinet during 2014 for a variety of violations.
The Herald-Leader submitted an Open Records Act request to the cabinet for documents identifying stores that were disciplined for WIC Program infractions. The cabinet responded with a heavily censored stack of inspection reports, disqualification letters, appeals and final orders from the cabinet secretary. All store names, street addresses and other information that could identify the businesses were redacted.
Even in rare instances when a vendor with deep pockets has sued the cabinet in court to appeal a WIC Program disqualification — as Kroger has done in the past, for instance — the cabinet removed the store's name from publicly available lawsuit filings before releasing them.
"The Kentucky WIC state agency is bound by the federal WIC vendor confidentiality regulations," cabinet spokeswoman Jill Midkiff wrote to the Herald-Leader late last month.
The U.S. Department of Agriculture agrees that one of its regulations prevents states from publicly identifying stores punished for WIC Program violations, although it says the origins and reasons for this rule are unclear. And the regulation is unevenly enforced. Some states, such as Massachusetts, have posted their WIC Program disciplinary actions against stores on public websites.
In recent years, officials at the USDA who oversee the WIC Program nationally have proposed changing the rule and issuing public notices when stores are disqualified, USDA spokesman Johnathan Monroe said. They viewed public disclosure as "a helpful tool in deterring vendor fraud and abuse," Monroe said. But the government decided to leave the rule intact for now.
"As part of our ongoing effort to increase transparency in our nutrition assistance programs, USDA is currently re-examining its disclosure policy with respect to public notice of WIC vendor disqualifications," Monroe said Friday.
State agencies sometimes do a bad job of policing WIC Program stores on their own, according to a 2013 investigation by the USDA's Office of the Inspector General. In two of the three states reviewed — Florida and Illinois — inspectors found "significant issues" at state agencies that allowed errant stores to continue collecting millions of dollars in WIC Program payments after they were supposed to have been disqualified.
Republican state Rep. Robert Benvenuti of Lexington, who was inspector general of the Cabinet for Health and Family Services under Gov. Ernie Fletcher, said he had not previously heard of the confidentiality requirement for wayward WIC Program stores. Benvenuti said he couldn't "imagine a legitimate reason," given that it's a matter of public record when the state punishes other businesses, such as coal mines, nursing homes and daycares.
"As taxpayers, those are our dollars spent in the WIC Program," said Benvenuti, vice chairman of the House Health and Welfare Committee. "The government has gotten those dollars from us. They didn't fall off the money tree. So we have every right to know how this program works and how it doesn't work, and how much fraud and abuse exists, and what — if anything — we're doing about it.
"Without transparency, we'll never know any of that," Benvenuti said.
Can't see, don't know
The federal regulation at issue is 7 CFR section 246.26(5)(e). Regarding the WIC Program, it states:
"Confidential vendor information is any information about a vendor (whether it is obtained from the vendor or another source) that individually identifies the vendor, except for vendor's name, address, telephone number, web site/email address, store type and authorization status. Except as otherwise permitted, the state must restrict the use or disclosure of confidential information."
Not everyone agrees with how Kentucky and the USDA interpret this.
Ann Hunsaker recently retired as a lawyer for the Cabinet for Health and Family Services, where she helped prosecute WIC Program violations. Hunsaker said the regulation clearly says that store names are not confidential — and in fact, Kentucky freely publishes the list of stores participating in its program. The stores also post large signs in their windows to announce that they take WIC Program payments, she said.
It's likely the confidentiality rule was meant to shield financial information the state holds about the stores, such as their monthly revenues from grocery sales, not their names, Hunsaker said. Stores cannot participate in the WIC Program unless they can show that they earn a set portion of their income from groceries.
"Once a store's appeals are finished and a disciplinary action is final, then it seems to me there is far more harm to the public by not making these store names available," Hunsaker said.
"Shouldn't a community know if there's a problem at the local grocery store?" she asked. "Sunshine is the best disinfectant. And sunshine only comes from seeing how the system works. Is Kroger getting a pass on violations when the smaller stores don't? Are the same problems recurring or are they getting resolved? We don't know if we can't see."
Randy Strause, a Louisville lawyer who represents grocery stores accused of WIC Program violations, said he agreed with Hunsaker.
"I would think those records are supposed to be open to the public," said Strause, a former administrative law judge and hearing officer at the Cabinet for Health and Family Services. "I mean, this isn't a matter of national security. Probably nobody has known about this until now or had any reason to challenge it."
Some people inside the USDA evidently had their own doubts seven years ago as the agency revised its WIC Program regulations. According to the April 22, 2008, Federal Register, the USDA initially proposed making it clear that store names are "not subject to confidentiality restrictions." It even planned to allow states to issue a news release every time they disqualified stores from the program.
"The Department believed that issuing public notices of WIC vendor disqualifications would deter vendor fraud and abuse in the WIC Program," the agency explained in the Federal Register.
Ultimately, however, the USDA concluded that the public doesn't need to know which stores broke the rules. It limited the sharing of that information to "other authorized vendors or vendor applicants, since such disclosure is intended to deter vendor violations."
'Such a big program'
Kentucky officials say that even without outside scrutiny, the state's WIC Program functions well for the roughly 112,000 women, infants and children it's currently assisting.
Stores must be inspected by their county health departments and have their applications vetted by the state cabinet before they join the WIC Program, said Ruth Ann Shepherd, director of the state Division of Maternal and Child Health, which oversees the program. Afterward, the stores are visited by state officials at least once every two years to guarantee compliance with program rules, Shepherd said.
Kentucky is one of the states pioneering the national WIC Program's move from paper food vouchers to "electronic benefit transfers," which is done by families swiping a plastic card, just as they would for a credit card transaction, Shepherd said. As a result, she said, Kentucky officials can monitor purchases and swiftly disconnect a store from the electronic network if necessary.
"We can't say with 100 percent certainty that nothing bad is going on," Shepherd said. "But we think we have a handle on things. Our folks can pull up a transaction that happened at Wal-Mart two minutes ago."
But Benvenuti and Strause said that, based on their experience working at the cabinet, there wasn't enough manpower to adequately monitor the hundreds of stores in the WIC Program. Years of state budget cuts likely have not helped, they said.
"There were only two or three folks in Frankfort responsible for handling these cases for the entire state. I remember, they worked like crazy trying to stay on top of everything," Benvenuti said. "It's such a big program — billions of dollars spent nationally — and then we seriously skimped on enforcing the integrity of it. My impression was that, at the federal level, fraud and abuse were just seen as the cost of doing business."
Bananas and lemons
The Herald-Leader recently visited one of Lexington's WIC Program stores, the Red Mile Chevron at 641 Red Mile Road. (Despite its legal business name, the gas pumps and adjacent convenience store carry Marathon signs.)
Several people stood in line to buy cigarettes, beer or lottery tickets. Nearby, a single spotted bunch of bananas sat above a large pile of Snickers candy bars. A half-empty refrigerator at the back of the store held the rest of the produce section: two green tomatoes, two mesh bags of lemons and eight cans of Dole pineapple slices. Milk was priced at $4.49 a gallon, or 25 percent more than the average consumer price in April.
Kentucky instructs WIC Program stores to stock at least two types of fresh fruit. The aging bananas and sacks of lemons met that burden.
The clerk on duty that afternoon said he did not speak English, and the store's registered owner, Mohammed Al-Wahaibi of Lexington, did not respond to a written request for comment.
"Stores are required to carry a minimum of certain supplies," said Nkeshia Coleman, WIC and Nutrition Team Leader at the Lexington-Fayette County Health Department. "So it might be they don't have a lot, but they do technically have enough — say, the four gallons of milk that are required. Other times, they don't have what they need, but they slide by because we can't be everywhere at once, so we're just not going to catch them."
Asked if a family conceivably could feed itself from the Red Mile Chevron, Kentucky officials said that isn't a requirement. WIC Program clients might buy a wide variety of food during their weekly supermarket visits and use a nearby convenience store to get just one or two items, like milk or bread, if they run out, Shepherd said.
"Frequently, our clients go to more than one place to shop," she said.
As for adequate state staffing, she said, six people oversee the stores from the cabinet's WIC Program Vendor Management office. They get some help on inspections from the cabinet's Office of the Inspector General and county health departments, she said.
"We'd like to have unlimited staff and do more," Shepherd said. "But there's a matter of resources. If someone wants to give us more money to do that, we'd be happy to."