I, too, just watched GFII this afternoon. Michael's continuing involvement in NY is made more clear by two statements that are made by Pentangeli.

1. He says to Fredo "You remember Willie Cicci who was in Brooklyn with old man Clemenza," which shows that Clemenza took over Tessio's old territory after his death and ran the NY operation.

2. During his argument with Michael in Nevada, Frankie tells Michael that he wants to be left alone to run his family, and Michael reminds him, "Tua famiglia ancora porta il nome Corleone," which translates to "Your family still carries the Corleone name."