Although some here have speculated on who Altobello was in his earlier days, like you, I can't think of a credible reason why he was scheming against Michael. For that matter, I can't think of a credible reason why Michael wanted Immobiliare. Or a lot of other things in III. As Oli and dt have said, this was one poorly scripted film. A friend, after seeing it for the first time, concluded that there must have been a dozen hours of film on the cutting room floor.
I think it's pretty clear why Michael wanted Immobiliare.
Gilday says it himself: "This deal with Immobiliare can make you one of the richest men in the world. Your whole past history, and the history of your family, will be washed away."
As for Altobello, I see two possible, reasonable reasons for his treachery.
1. He's been well-connected with Sicily, and presumably Lucchese, for years, so it's not surprising that he would side with Lucchese over Michael. Is that even treachery, by Mafia standards?
2. Alternately, he wanted a piece of Immobiliare as well, for the same reasons Michael wanted it. Big money and, equally importantly, clean money. He says as much to Michael, although he blames the rest of the commission and denies any personal interest. Michael denies him and he turns on Michael.
