Project Sanguine was an attempt at psychological warfar that, critics argue, crossed the line in a big way. While in clear violation of the Articles of War, no provision in the Battle Charter covered it, and so the Foundation saw no reason not to proceed with the project.
The idea was fairly simple: take psychopaths, specifically convicted serial killers, and turn them loose in enemy cities. The project also trained them extensively in espionage, sabatoge, and in general how to hide.
These killers would then be carefully smuggled behind enemy lines and released in large cities where they would terrorize the population.
Particularly employed during the Kamian Succession Wars, the project was generally condemmed as barbaric.
Though actual casualties were ultimately small, they were all civilians, and the idea of releaseing serial killers with the goal of killing civilians was considered "too far".