In the First Strike series of missions on Ilum Darth Malgus fascination of using aliens to bolster the Empire finally reveals itself, so much so, he and the Moff get in an argument over this topic. The player has the choice to support either Malgus or the Moff, I consistently supported Malgus (mainly because Malgus is a war hero and looks like Sith lord should and who can support some twerp with a whiny voice).
Consider as well that some of the earlier flashpoints, Hammerstation in particular, the player has the option to convince Malgus to enlist the very aliens the party has just defeated. Fast forward to the two FP's Battle for Ilum and False Emperor and if the player supported Malgus and a less xenophobic Empire there is no reward for it, insomuch as the game does not recognize it. So if you supported on a consistent basis a less xenophobic Empire you still end on the side of the current regime, thus you fight against the very thing you support.