Ha ha ha that's awesome Wyrd! He wanted to hit you for thinking big (which means more work). I get it.
![laugh.gif](style_emoticons/sinders/laugh.gif)
As far as my dilemma with Vvardenfell Bandits, last night I did discover that NPCs do have a Faction pull-down menu... it's just that Morrowind's Construction Set does a lot of things different from Oblivion's, so I didn't see this pull-down until last night.
So what I did was I made a custom faction called aaaBanditFaction, and made this faction have a -3 Interfaction Relationship against Imperial Knights and Imperial soldiers. I haven't tested if this works in game, but it should. I noticed Thieves Guild and Camona Tong also have a -3 relationship between them, which is why my Thieves Guild character got attacked when she went into the Tong's cornerclub last time.