Favoritism based on the employee being friends with the company Administrator

I have participated in chart reviews where the employee displayed poor work performance and the chart was witnessed being out of compliance.
The employee who displayed poor work performance
while the other employee with experience and good work performance was asked to take a lower paying position despite her abilities. Other staff have reviewed records and wondered why this employee is allowed to get away with not following policies, not attending mandatory meetings.

Many of us are apprehensive about taking legal action or reporting the concern to upper level management due to concern of being terminated due to a previous employee being dismissed for speaking up about the favoritism observed. although we want this type of behavior to end.
I personally have witnessed the boss driving the employee home due to being intoxicated from a night club. The boss and the individual appear to be friends and leeway is given while others are expected to follow the rules and policies and this is unfair.