I think that in the novel Michael was serious about doing a Kennedy and letting go of most of his illegal enterprises. It was hinted that he actually was a good enough businessman to run things profitably (mostly)within bounds of the law.

Howard Hughes was able to run his Vegas casinos without the Mafia in the sixties - it must have been possible for somebody who had enough money and clout.

Politicos would have remained wired into Michael, I imagine, as an insurance against being taken out. He'd still mediate political protection, while extending political connections into the West.