Sonny was involved in somekind of a robbery (much like Connie's boy in GF2). Clemenza informs Vito about it and Vito reacts by calling Sonny in and screaming at his stupidity in risking his life for a pitiful some of $50. Santino reacts smilingly by telling Vito that he saw Vito kill Fanucchi.

Vito, taken by surprize (much like Mike in GF3 when Kay told him about Anthony knowing about Fredo), doesn't know how to respond. He thinks that by knowing his deed, he thought that he couldn't tell his son how to live his life: "...every man has but one destiny..." (Vito to sonny in the novel)

After that, Vito decides that Santino should be brought next to his father and work with him. The public reason was so that Sonny would learn the business, but Genco thought it was to have Sonny as a bodyguard as well as learn the business.