Locate traitors in West Freeport and turn them into the Freeport Militia
While walking around, you will be attacked by a conspiring citizen (level scales solo guardians). At under 20% health they surrender. Arrest them by talking to them and selecting "You're under arrest. I'm taking you to the Freeport Militia!" Walk them up to Captain Clausin Bludwins. You don't need to speak to Clausin - the quest updates automatically when you're close enough.