ugh, dunmer dont make great theives. If you arent very far in the game, restart and make a khajiit. I can't imagine being able to do anything without my super sneak and security (imagine, i can sneak right in front of ordinators and steal anything i want. pickpocket almost anybody, and i'm invisible to everyone when i push the sneak button... never seen until I want to be seen).
Either way, if you dont start over. Save game while youre in the council club. Walk to the middle of the bar so that when he greets you he turns his back to the wall and faces the center of the room. This is important because others can spot you pickpocketing just as easily as he can. move around behind him and try to steal the key (push and hold sneak for a bit. if the invisibility icon shows up, all the better, but it isnt necessary since others can see you, but hopefully not the target, hold your target over the character and push space to open his 'inventory' which is things you can attempt to steal). If you fail, reload. You get alot of experience for sneak out of succesfully pickpocketing this guy, so its not worth bribing him if you want to work up your sneak skill.
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mages may seem cool, but if there was a multi player game you wouldnt see my theif/assasin until you were already too dead to cast a spell...
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