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Madeline
Involvement
Madeline tended bar at the distillery The Waning Moon many years ago, during the time when the army of Ketheric Thorm's Dark Justiciars occupied the town.
When first discovering her, He Who Was performs 
on her corpse to try to interrogate her, beginning the quest Punish the Wicked.
He Who Was is a 
shadar-kai who seeks the guilty, tormented and anguished. He fittingly found Madeline, whose spirit is stuck in grief and regret over her actions while she was alive. Claiming that he is seeking justice for Madeline's crimes, He Who Was will ask the party to retrieve 
Madeline's Ledger, found "where lies Madeline's guilt", under a loose plank behind the bar at The Waning Moon.
After the ledger is brought back, He Who Was will channel Madeline's spirit once again, allowing the party to question her this time. Madeline will explain how she was to report to Dark Justiciar Netasha any observed dissent against Ketheric and his army. Fearing for her life, Madeline betrayed many of her friends and patrons to Netasha, who captured and killed them in horrific ways.
Madeline will express grief and regret for her actions, believing herself beyond redemption or forgiveness. The player can forgive her, and let her spirit move on in peace, or choose to admonish or punish her.
Related literature
Madeline's Ledger - found under some hidden planks in The Waning Moon
Notes
- Many of the developer notes for He Who Was' dialogue lines mention not only the cruelty underlying his intentions, but that much of what he says to the party is trying to manipulate them into torturing Madeline.