I hate to resurrect this, after all the great responses. They all make sense, so I hate to beat a dead horse, but...

I was watching this again on Bravo last night, and a thought occurred to me. I remember watching Mystic River, and Sean Penn's character was trying to make the Tim Robbins character "admit what he did," and Penn would allow Robbins to live. Robbins, after seeing that "the truth" wasn't going to cut any mustard, admitted to what he didn't do, hoping for the chance to live.

Is it possible that Carlo was doing the same thing?