He accidentally drowned his partner using baptism as a form of waterboarding. In Van Alden's defense, the partner had accepted a bribe and murdered a key witness in an investigation that could have toppled the local crime kingpin.
It really rattled Van Alden because he finally realized fighting the crime and corruption growing during the prohibition era was turning him into someone as bad as the crooks.
Also, Michael Shannon, the guy who plays Van Alden, is so far into the character, it's kind of scary.
I don't think it was an accident. It was situational and opportunistic, but you don't "accidentally" hold somebody under water too long. Not in front of ALL THE BLACK PEOPLE IN TOWN.
He seemed genuinely upset by it, though. He's not the most expressive character (which is intentional) but he had a horrified look on his face when he realized what he'd done.
I really think he was trying to scare the guy into confessing and didn't realize how long he held him under that last time.