As far as villains go, Tethseram is pretty small fry. His ambitions are somewhat unclear, as his end came about...ok, I get ahead of myself. Tethersam's first official act in SL space went unknown to the Council for quite some time. After piecing together the puzzle, here's what we know happened.
Shortly after the destruction of the Panopticon, Madman was pulled to a space station located in what can only be described as a reality “bubble”. An area of nothing between two universes – in this case SL-Space and Madspace – the pocket universe contained in the Eye of Harmony of Madman's Capsule.
Madman was held there for over a century, all the time being brainwashed by Tethseram. The influence was subtle – Tethseram wasn't going for complete control. Just influence. Upon returning Madman to SL-Space and wiping his conscious memory of the incident, Tethseram began exerting his control over which voices in Madspace found their way to Madman's mind through his Capsule's telepathic circuits.
Madman slowly began to distrust authority in any form as his mind struggled with what had happened. When Tethseram's ego got the better of him and he began taunting New Gallifrey, Madman saw an opportunity, not realizing he was hunting his own oppressor.
He sent in Gothess as an agent undercover into Madspace, unaware that the Agency already had someone inside. Gothess largely succeeded in her mission. Unknown to anyone else at the time, another young Timelord named Dracony had grown suspicious of Gothess and followed her into Madspace. Eventually, both were discovered and captured.
Upon learning of their disappearance and being completely unaware of Gothess' mission, the Council ordered the Agency to activate the Recall on both Timelord's Capsules. However, instead of returning them to New Gallifrey, both Capsules were used as advanced sensor probes to map and record as much of Madspace for the Matrix as possible.
Between the Capsules' scans and Agent ***REDACTED*** undercover report, the Agency had enough intel to mount a rescue. The incursion was a partial success, with only Gothess being discovered and returned. She had been brainwashed by Tethseram and was going to be returned to SL-Space as a double agent.
After being interrogated by the Agency and her memories and mind restored by the Sisterhood, a chilling truth was revealed. Tethseram was in fact a future incarnation of the Madman himself.