Navy Times is reporting that CAPT Graf's continuation board recommended that she be forcibly retired with a general discharge.
I read through some of the comments that CAPT Graf was favored because her sister is an admiral. I don't know anything about that.
But a long time ago, I knew one admiral who was so dumb that he should have been watered twice a week and the only reason anyone could figure out that he had gotten so far was that his father and his uncle were both admirals. Maybe a cousin and a brother as well, I've forgotten. There were weekly stories going around the waterfront about what stupid thing that admiral had said or asked in the weekly staff meeting.
So yes, nepotism did exist in the Navy and it probably still does. Idiot offspring who are legacy admissions isn't confined to douchebag sons at Ivy-league universities.