Michael was immensely wealthy in Nevada, and he flaunted his wealth via his huge estate, his big contribution to the state university, and the lavish party he made for Anthony with its thousands of invited guests. But, when asked at the Senate hearing if he had a controlling interest in three of the major hotels in Las Vegas, he replied, “No, it is not true. I own some stock in the hotels there, but very little.”

Why would he hide his ownership of the hotels? Gambling was legal in Nevada (so was the brothel), the licenses were “grandfathered in” as Geary reminded him earlier, and the hotels would provide perfect financial cover for his ill-gotten gains (like the tribute he was undoubtedly getting from the NY “olive oil business” and, I’m guessing, from loan-sharking the degenerate gamblers at his hotels). Living as high on the hog as he did would have invited IRS scrutiny, and the Gaming Commission could easily have uncovered his ownership interests—and yanked his licenses for failing to disclose them.

Your thoughts?

I think that the viewer's takeaway is supposed to be that Michael was trying and in this case failing to be like his Dad. Vito's "I'm just a minor league olive oil importer" has become Michael's "I'm just an investor in a few hotels."

Also like Vito, Michael is allergic to letting anyone know his full business. So he uses a lot of fronts (Johnny Fontane and others) to avoid disclosure and most likely avoid taxes. This is true even when in this case, the business was entirely legal. Privacy, even when nothing would be lost by disclosure was Michael's personal and business style.

Wealth to Michael was not relative to possessing anything he knew others had as far as their net worth. Wealth to Micheal was Power , he already had the money.

Power was his Treasure.

There might be a long-standing cooperation with the state: bring construction money in, hold ultimate control, but do it all through respectable third parties so that regulators aren't constantly nagged about connections between the casinos and underworld figures.

Interesting point, Pete. After gambling was legalized in 1931, the Nevada Legislature put oversight into the Tax Commission. Oversight was lax--they didn't look too closely at gaming license applicants as long as they were going to bring taxable income into the state. But, as you imply, the gangsters may have had a quid pro quo with the state to use front men for licensing purposes in order not to call attention to the cozy relationship. That changed in '58, when, after embarrassing revelations about OC involvement in Nevada gambling, the Legislature took control out of the Tax Commission and put it into a new Gaming Commission, which had real regulatory teeth. Harry Reid, former US Senate Majority Leader, was an early chief of the Gaming Commission.

Michael's appearance before the Senate committee was his first, it was documented, and it was public. He was inexperienced in such proceedings. In a criminal proceeding, even an honest mistake one makes when testifying can subject one to a perjury charge.

Why he testified at all or didn't invoke the 5th amendment is beyond me. Whatever information he provided to the committee would either be true or a lie, or would either be new information or would confirm what the Committee already knew or suspected. As is true of Mafiosi generally, government cannot confirm their ownership of anything since Mafiosi are not inclined to document such ownership unless it is legal ownership. There was nothing for Michael to gain by admitting his controlling interest in the hotels (Of course, he could have avoided answering any questions by invoking the 5th Amendment).

One thing I teach my classes is that whether you are simply a witness or a person of interest in a legal proceeding, you cannot be sure of law enforcement's strategy or your potential culpability.

Although he was living high on the hog, I give Michael credit for having the necessary and legal financial resources to sustain such a lifestyle just as Vito must have done.

No doubt he was subpoenaed to appear and couldn't risk ducking the subpoena.

As for invoking his Fifth Amendment privilege: Suppose, after being asked if he planned the murders of the heads of the Five Families, he replied, "I decline to answer that question on the grounds that my answer might tend to incriminate me." Sure, he'd avoid perjuring himself. But, everyone would know that the reason his answer "might tend to incriminate me" was that he did plan the murders.

So how wealthy was he supposed to be?

My take, for what it is worth!

Extracts::

Sure thing Turnbull It also gave Tom the ammunition to gloat, relish and even demand an apology from the senate committee!
“Sir, my client has answered every question asked by this committee with utmost sincerity [!] He has not taken the 5th amendment as it was his right to do. So in all fairness I think the statement should be heard”

The chairman was perhaps goaded and pressured into
“No, no I am going to allow Mr. Corleone to read his statement I'll put it in the record” against the advice of the senator and Questadt

The committee was not able to pin anything nefarious on Michael and perhaps Michael gained that he was a legitimate business man! by admitting “Just own stock in some of the hotels there but very little Also in IBM and IT&T”

How Michael was able to “live high on the hog” on very little is for another senate hearing!

Michael and Tom were supremely confident

He challenged the committee to produce any witness or evidence against him, believing Pentangeli was dead

TB keeps suprising me that after all these years, threads, questions and endless discussion, he is able to come up with yet another legitimate question even though the content is quite limited. It's too bad that there are just three movies and not an entire franchise with spin-offs and tv shows. Netflix should do something with this.

Exactly Turnbull

and how dare they besmirched his name