The Action Network is a behind-the-scenes umbrella organization, a highly influential tech company most have never heard of that provides digital support to Democratic Party fundraising and the unions for organizing.  It also services progressive organizations, including fanatical neo-Marxist organizations like Black Lives Matter or the communist Democratic Socialists of America.  The Action Network was highly instrumental in the anti-Trump movement.  Although it shares the same name with Al Sharpton's nefarious charity, it is not affiliated. 

It began in 2011 as the Corporate Accountability Project charity ((501(c)(3)) to partner with labor unions and community organizations to expose and prosecute businesses.  Later, it rebranded to the Action Network Fund and expanded its scope into progressive politics.  Highly partisan Democrats lead the board. Founder Mark Fleischman is a former union organizer and formerly served as vice president of the Service Employees International Union (SEIU).  Douglas Land, who serves as chairman of the board, is affiliated with the Anti-Defamation League. AFL-CIO President Elizabeth Shuler serves on the board. 

The Action Network, a sibling social welfare non-profit ((501(c)(4)), created Action Square, a robust digital platform to organize activists, mobilize supporters, and generate event campaigns, crowdfunding, and petitions for Democratic Party and progressive causes.  The non-profit boards are interlocking, with Laura Quinn added as an Action Network member-at-large. Quinn is the president of the for-profit Catalyst, an election data repository of over 256 million voters providing behavior, demographic, and issues analysis and modeling to the Democratic Party and progressive organizations. Catalyst is integrated into the Action Square platform and collects fees from the members who utilize its service.  The 990 tax returns fail to disclose the related party arrangement.

Action Square is a "Swiss army knife" that provides mobile messaging, mass emailing, scheduling events, demonstrations, call campaigns, petitions, fundraiser solicitations, and letter campaigns.  The platform incorporates a handy smartphone app.  The toolset is available in multiple languages for international campaigns.  Membership in each campaign is by invitation only, which conceals activists and donor identities from the public, an opportunity for "dark money" influence.

In 2019, the Action Network organized the for-profit Action Squared, LLC, transferring the digital platform to a wholly-owned subsidiary.  The legal structure conceals consulting and membership revenue, subcontractors, and director and officer compensation.  For example, according to the Federal Election Committee, Action Square received over $11.6 million for marketing and fundraising fees for Democratic candidates, including President Biden, and political action committees.  There is no public record that Action Network filed a required business income tax return.  Did the Action Network evade paying corporate income taxes?

Internal Revenue Code section 501(c)(4) provides for the exemption of “civic leagues or organizations not organized for profit but operated exclusively for the promotion of social welfare.”  The organizations must promote the common good and general welfare, benefitting the community, not select populations or groups within the community.  To satisfy this requirement, the organizations engage in educating the community and conduct their activities in a non-partisan manner.

The Action Network appears to flunk the dual test by advocating exclusively for the Democratic Party and progressive organizations and running an opaque for-profit subsidiary.  It enables organizations like BLM to foster hate and polarization.  The Action Network may well be viewed as a for-profit organization subject to federal and state taxation. 

 Bob Bishop is a forensic investigator and retired CPA.

Image: Action Network