re: The Godfather: Rewatch

The book is excellent and a must read. It provides more detail and background , which helps you understand the movies.

Tom was not demoted. Michael wanted to make the Nevada operation legitimate/legal. He wanted his children to have social standing in the community and possibly obtain political power. He needed Tom to move away from the family business to initiate the transition to the legitimate world. Also, he needed to protect Tom from what was about to occur. Michael knew he was about to bring down the wrath of the Corleone family upon the other families and Moe Green. Not knowing how it would end up, he needed it to appear as if Tom was now a civilian in the event something bad occurred. Finally, he wasn’t sure of the identity of the rat in his family. Turns out there were three : Tessio, Connie’s husband and Fredo. He needed to isolate all three until he figured out who else was involved outside of Tessio.