I had thought that to myself when the episode initially aired. A more knowledgeable member could help out here by stating whether there is a real-life precedent for what Barese did. Apparently, Luciano when he was arrested for a narcotics charge he "ratted" out one of his own stashes so as to get leniency from the cops. This was in 1923 or so and it didn't get him in much trouble, but it apparently came up during his testimony with Dewey in 1936.