For the third time, Jimmy wasn't a rat. Junior didn't call Jimmy a rat until Season two when Jimmy was already dead. He wouldn't of known anyway, as he wasn't the real boss, and information went through Tony first before it even got to Junior. They simply got it wrong, like I said before "two fat fucks with black hair", the cop told Tony it was Pussy all along, but killed himself before he could confirm it. Sil told Tony the cop was in debt to Pussy, which could be reason why he'd lie, which influenced Tony's decision. He didn't want to believe his best friend was a snitch and told the feds everything.

The confirmation that Jimmy wasn't a rat came in the very first or second episode of Season Two. When Pussy's handler is driving him home after his back operation and he's asking Pussy if Tony knows he's back yet and Pussy lies and says he hadn't seen him yet, even though he showed up to Tony's house. His handler is coming down on Pussy telling Pussy that he needs to gather some real info on Tony and not bullcrap, and telling Pussy not to feel sorry for Tony because he tried killed his own mother and doesn't even trust Pussy like he used to and he passed Pussy over for Underboss. The guy then says "Jimmy Alteri ate the pill for you". Meaning, Jimmy was sacrificed for the sake of Pussy staying alive and being able to gather more information.