I thought Vito kept tabs on everyone and everything [uh-oh before slipping
From the novel:
"They [Tom and MIchael] looked at each other. This was perhaps the real reason the Don was displeased with Freddie. The Don was straightlaced about sex. He would consider such cavorting by his son Freddie, two girls at a time, as degeneracy."
Michael was blindsided that business was suffering! because of Fredo's philandering not because of Greene's skimming off the top
Fredo's banging cocktail waitresses two at a time actually saved Moe money--he complained that "the players couldn't get a [free] drink at the tables." Moe was based on Bugsy Siegel. Bugsy was a poor businessman who spent nearly six times more than the original estimate to build the Flamingo Hotel in Vegas. He opened it before the guest rooms were finished. The high rollers came early on opening night and cleaned out his casino, then left for the sleeping rooms at the other hotels in town. The Flamingo's losses were what caused Bugsy Siegel to be assassinated--"someone put a bullet through his eye."