Having been in a position where I was the one hiring judges--at one big open breed horse show and for one Mini show (which in the end didn't run after all)--what I've found is that you hire judges by phone/e-mail/letter. There is no face to face contact. Those judges knew me by a name. They couldn't pick me out of a group of people. When it comes to show time, there's usually someone else (someone not showing in the show!) that meets those judges at the airport & ferries them to/from their hotel & takes them out to supper & lunch. When we're showing, I go out in the ring & the judges don't have a clue which person out there is the one that hired them. Yes, once class results are announced then they can put a face to the name.
However, I think that judges are smart enough to know that it wasn't one individual person that hired them. It was almost always a committee decision. Most judges aren't going to play favorites just because one of the exhibitors happens to be the person that phoned/e-mailed & hired them to judge.
Husband/wife/son/daughter/sister/brother as show chairperson & then the relative showing? Yes, it's allowed. The only rule in AMHR is that the show manager cannot show personally, though I believe he/she can have horses exhibited by someone else.
Of course you will always get people complaining about how so & so hired the judge so of course so & so is the one winning everything. That goes right along with the complaints that this person is a professional trainer & is winning everything, or that guy over there always has his horses shown by big name trainer & so wins everything. Or the judge is good friends with that exhibitor and so that guy is winning everything.
So, do I have a problem with an exhibitor having been the one that hired the judges? No. I would not be happy if that exhibitor (or any exhibitor) or his/her immediate family was the one that was meeting judges & taking them to supper & lunch & transporting them to their hotel and I don't like to see a judge being chummy with an exhibitor at the show, but when it comes to choosing & hiring judges I just don't see an issue there.
And if you don't think that an exhibitor shoud help pick the judge, then who should pick the judge??? Here there are so few people willing to help organize a show that if you eliminate the exhibitors there would be no one left. And if a non-exhibitor were responsible for picking the judges you can be sure that he/she would be looking for suggestions for who to hire, and the suggestions for judges to pick would be coming from friends & family members who are exhibitors!