Thinking with Apple in the boat house when Mike was questioning Fredo, Fredo says that Johnny Ola approached him to help with the deal between Mike & Roth. Fredo says that if helped move things along there would be a piece of something in it for him. Now before you flame me I am loosely quoting here.

But this leads me to believe Fredo thought he was getting the best of both worlds but mostly was helping Mike out. Plus Fredo was looking for respect from Mike and he thought making this deal would give him that respect from his younger brother that he always sought. He wasn't looking for respect from anyone else, just Mike.