Oh, blackmailing. I really enjoy Sethyas' diplomatic actions. Yeah, it's such a shame that Morrowind doesn't allow it too much.
The only example I can remember right now is that Hlaalu mission where you go seal an egg mine. I blackmailed the mine's owner into giving me money yet I still killed the queen afterwards so I got paid by the Hlaalu. Twice the pay, once the trouble.

(Hmm, that sounds like a Hlaalu motto.)