cronyism: to appoint someone to a position of power chiefly because of their friendship.
17 Aug 1952 NY Times: “The amount of politically entrenched bureaucracy that has earned for Mr. Truman’s regime its sorry reputation for corruption, cronyism, extravagance, waste and confusion…” (The NY Times never changes, does it?) (Sources: OED, Merriam-Webster Online)
Example from the news: Bush Risks Calls of Cronyism in Selecting Friend: “Even with Washington awash in controversies involving allegations of political cronyism, President Bush was undeterred in choosing a close friend and longtime advisor for the Supreme Court.”
