Paulie was no dummy. He knew Henry and Jimmy were involved in that mess, and so did Billy Batts' people. But why throw away 2 smart and capable moneymakers? So he plays stupid and throws Tommy to the wolves, the Gambinos can save face and say they got revenge for Batts, everyone is satisfied.
To truly understand how cunning Paulie is, consider the move he and Henry pull on the connected restaurant owner(Larry Boy in The Sopranos). They basically make good use of Tommy's natural psychopathy and use him as a bad cop to their good cop routine to take over his restaurant.
While Tommy was busy playing tough guy and waving guns around in crowded restaurants, Henry spotted the opportunity and suggested to Larry that Paulie will probably "help him out". Remember in that sitdown Henry is right there and gives Larry the go ahead to make his plea to Paulie. So Paulie cynically makes a big show of how his hands are tied and he can't control Tommy etc. and then he "reluctantly" accepts a piece of the restaurant... and then he fukks Larry in the ass by running up unpaid bills on the store's credit and then setting it on fire for the insurance money.
That's why Paulie is upper management, because he can be an apex predator while keeping his hands clean, while Tommy was a just another low level grunt in an army of low level grunts..
tommy takin mama knife to kill billy and telling mama he'll bring it back
" 
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