Here's a somewhat similar story that might be helpful because it tackles some similar issues of block voting without the politics.
The Annie Awards is an annual ceremony put of by nonprofit organization ASIFA-Hollywood with the goal of recognizing outstanding achievements in animation. It started out in the 1970s with just a handful of lifetime achievement styled award to the legends of the art form, but evolved over time to become more of an Oscar-like event with awards for the best achievements of the year. And like the Oscars, the Annie Awards have been the subject of a few controversies over the years, including what happened with the 2009 awards.
As of 2009, all members of ASIFA were allowed to vote in all categories, and all you needed to do to become an ASIFA member was to purchase a membership. DreamWorks Animation was (and may still be) purchasing ASIFA memberships for all of their employees as soon as they were hired. In addition to running the Annie Awards, ASIFA-Hollywood is active in film preservation and education on the art of animation, so giving them support is certainly not a bad thing. But the end result of DreamWorks subsidizing memberships for its employees was a huge DreamWorks voting block that led to DreamWorks sweeping the 2009 awards.
Now there are perfectly reasonably arguments to be made about whether Kung-Fu Panda, which won every category it was nominated in, is a better film than Pixar's WALL-E, which failed to pick up a single award. But the strong showing of Kung-Fu Panda: Secrets of the Furious Five in the television categories raised suspicions and the win for the Kung-Fu Panda video game in the Best Animated Video Game category made t clear that many voters were simply voting for anything DreamWorks related in every category.
Animation fan reaction was generally negative and Disney responded by pulling all support for the Annies the following year. Even more troubling than the WALL-E shutout was the idea that the Annie could become nothing more than a pay-to-play competition between big studios to bestow awards on themselves, with absolutely no hope of independent production who couldn't afford to buy ASIFA memberships for large numbers of people seeing any awards.
Reform has been a slow process, but it is happening. Among the changes that have happened or are slated to happen are restricting some categories to professionals and others to people in the relevant field. and committee approval of voters. Disney does appear to have returned as a sponsor. The movie based games have largely disappeared from the Best Video Game Animation category.
I'm not saying that this is exactly the same situation as the Hugos and the Sad Puppies, or that the steps the Annies have taken are the way the Hugos should go. But I do think it demonstrates the problems of block voting and a small group of people being able to greatly influence voting for awards. Plus it's an example where how you feel about the different sides' personal politics doesn't factor in so much.