"Because I'm the Boss
That was the sign.
I don't think Phil is necessarily homosexual, whether he's conscious of it or not. I think that, in prison, he was faced with the choice of masturbation for twenty years, or substituting a guy somewhere along the way. When Phil is talking about the compromises he's made through two decades in the can ("Walk Like a Man" if I'm not mistaken) he says "I wanted to fuck a woman, I compromised...I jacked off into a tissue". Something about the fact that he specifically said "woman" instead of "I wanted to have sex" seems to give it away. Then there's also the fact that it seems his wife either knows this or at least senses it, and uses it against Vito when telling Phil how much of a disgrace to the family the situation is. Her insistence was probably based on a combination of her desire to make her husband feel better, and her ridiculous archaic religious beliefs. Phil struck me as similar to those self-loathing conservative politicians that spend their careers voting against every bit of gay rights legislation, and voting for any discriminatory policies, while they themselves are homosexual.