Minimum Level: any
Trigger: asking about "little secret" in Balmora when you are 3rd level or higher will tell you that Varro wants to see you; "latest rumors" will tell you about Varro's oath and leave it to you to go look him up
Quest-giver location: down in the barracks room at Ft. Moonmoth
Situation: Varro has sworn to stamp out corruption. A certain magistrate, however, is beyond the long arm of the law because he has the support of certain elements of the Camonna Tong. Without really saying so, he wants you to remove some of that support. Five of them, to be exact.
If you ask members of the Thieves Guild (just about everyone at the South Wall cornerclub) about "bad people" and they will tell you who and where the bad people are. Conveniently, all five of them are at the Council Club (at the foot of the stairs to the silt strider platform). You might be able to get this information without being a member of the Guild, but I haven't tested it.
The Good:
Your reward is a Ring of Surroundings (casts "Chameleon"), a volume from "The Wolf Queen" (increases your Speechcraft), and a 1-point boost to your reputation overall. The baddies have so-so treasures that include a couple of magical weapons that will probably have no charges left by the time you can take them off of the corpses.
The Bad:
The Smith is Thanelan Velas, 9th level, 116 HP, 92 MP (Resist Fire, Ancestor
Guardian), Dwarven War Axe
The Savant is Sovor Trandel, 9th level, 79 HP, 130 MP (Resist Fire, Ancestor
Guardian), no weapon
The Thief is Madrale Thirith, 9th level, 76 HP, 106 MP (Resist Fire, Ancestor
Guardian), Iron Sparkblade
The Pawnbroker is Marasa Aren, 9th level, 76 HP, 126 MP (Resist Fire,
Ancestor Guardian), Iron Arrows/no bow
The Scout is Vadusa Sathryon, 9th level, 100 HP, 98 MP (Resist Fire, Ancestor
Guardian), Steel Vipersword
The bartender isn't one of your targets and he doesn't pitch in if you can provoke a fight, but here are his stats: Banor Seran, 8th level, 76 HP, 122 MP (Resist Fire, Ancestor Guardian), Iron Warhammer
Take healing because you're going to take damage. On the bright side, two of the three in the main room use hand-to-hand and are not very good at it. The other two can be taken out one-on-one if you're careful.
The Really Bad:
If you cannot provoke a fight and must simply wade in, you're going to be wanted ("hunted" might be more accurate). You will need to get back to the Thieves Guild without being seen in order to get the bounty off of your head. After taking care of that little chore, you will need to get back to Varro (again without being seen) to clear up the legal end of things. If you cannot accomplish these two things in that order, you're going to be having guards pounding on you for the rest of the game (good for working on those melee skills, but very bad for getting anything else done).
Helpful Hints:
If you have a decent Speechcraft skill, you should be able to taunt them into attacking you. This will completely eliminate the "Really Bad" part of the quest. A couple of Telvanni Bug Musk potions should boost your Personality to a point where you can overcome a low Speechcraft. You will need to do three to seven successful taunts in order to provoke an attack. Each failed taunt drops the target's disposition and you will have no chance of provoking a fight if it reaches zero. Needless to say, you should save the game before each attempt at provoking a fight.
If you cannot manage to provoke a fight, you will need to get by the guards on the street and in the fort to complete the quest. If you have a "Mark" and a "Recall" spell, you can teleport yourself to the Thieves Guild to take care of the bounty. Otherwise you'll have to sneak. From that point, it isn't too difficult to climb over the south wall and go cross-country to the fort. There are three legionnaires in the courtyard of the fort. If your Acrobatics skill is decent, you can avoid them and get into the fort by climbing the hill beside the fort, jumping onto one of the towers and going in through the trapdoor.
If you cannot avoid the bounty, you do not get the "Wolf Queen" book. That's Varro's little contribution for being discrete.