Joe Barbaro is still alive at the end of Mafia III.

My theory goes that Leo Galante knew that Vito and Joe were too valuable to kill but also Vito never meant as much to Leo as we're lead to believe.

With Henry bringing down the commission by creating a war inadvertently between the Mafia and the Chinese all the while bringing the heat on all of them with these feds keeping a close eye on everything, Leo saw a way to bring peace while at the same time killing two birds with one stone. Leo was a truly a brilliant strategist.

Leo was really manipulating the events and controlling everything behind Frank Vinci's back. Remember Vito and Joe brought down two powerful crime families in Empire Bay with out any fear.

After Carlo Falcones death we're lead to believe that Joe has been taken to meet his death but my theory goes Leo convinced him to work for him and Vinci.

• Leo made a pact with the Chinese for peace by promising to get rid of Falcone so that they and Vinci may control the city in peace.

• After Falcone's death Leo lies to Vito by telling him "Joe was never part of their deal" and has Vito exiled to New Bordeaux to work for Sal Marcone seeing as Vito is a good earner and can still make the commission money, (here I believe that Leo lost all respect for Vito and only kept him alive for money making purposes). Vito is someone who values his own life and is loyal and a man of his word, Leo gives him his life back in exchange for not being killed but still in Leo's control in a way. This is way of making sure Vito won't do anything stupid like kill Leo because Vito doesnt want to die.

• Leo made a deal with Joe by threatening to kill Vito but promises Joe he will keep Vito alive if he works for him and Vinci, (without Vinci knowing of course). Joe is someone who could give a fuck if he lives or dies but is truly a loyal friend to Vito and would do anything to make sure no harm comes his way. Leo sees this as an advantage and hold over Joe and has him never contact Vito, of else face consequences for his actions. Leo knows that Joe is fearless and strong and can be used to further Vinci, or later on Leo's, stronghold in the Mafia.

• The two friends are now under Leo's sole control and to his benefit and controlled. Knowing that of the two ever were to make contact, (with Vito ever learning the truth about Joe being alive), would cause havoc once again and force the two to exact revenge on not only Leo, but the entire commission, which the two most likey are capable of. Which is the reason for the keeping apart and being lied to.

• The driver at the end of Mafia III is Joe who works for Leo.