RRs are handed out to stories that deserve them. period. i have handed them out to friends as well as to people i've never spoken with before. a little history - the RR was developed in order to showcase some writers who are excellent and haven't gotten the exposure that some of those more outgoing have gotten - we keep that in mind. for every "friend or fellow mod" that i've given an RR to (and i think that Dancing Doll's were well earned, as were Jaymal's, quite honestly) i've made it a point to give one to someone whom i admire and have never even spoken to. That's why you'll see RRs on people like TamLin or Feather Watt or Metilda or Alexanrda A - excellent writers who are either new to the site or have flown under the radar here.
yes, when it was first introduced, a lot of us made it a point to honor some of the older writers who deserved them in the past - now, though, it's more a matter of reading a new story and being so wowed that you want to do more than just leave a comment - btw, if i give something an RR - i always leave a vote and comment. that's fairly common practice among the mods when they are able.
so, to answer your underlying question, OMKN - no, they are not based on favoritism - feel free to compare my friends list to the RR list if you have the time. you'll find my friends woefully under-represented. and please, in the future, if you have an accusation to make, be direct. i'm not fond of insinuations.