I haven't directly witnessed it at the Brussels level, but certainly at national level in one European country, I have been a direct witness to how a public call for participation was put out for which it was well known in advance who would get the funding. -- If you want to make the case that Brussels is less corrupt than national governments, be my guest.
All you need is a bit of "procurement process theater". Put N focus areas into your call, corresponding to the N institutions you want to give the money to, and describe them in just the right amount of specificity. Add to that requirements like "to be eligible, an institution must have been in business for X years and have at least Y number of employees" to increase the status-quo bias.
In one instance I happened to be around such an institution in a year where the administration screwed up and didn't manage to put the call out in time. So an institution with something like 50 employees that was totally dependent on the funding would have had to close its doors for a year and reopen a year later after the next funding decision was through. Basically what happened was that the director of the institution went to his crony in politics and said "Hey you screwed up. We need that money, and we need it now." And the politician just kind of went "okay, here, have some money". Apparently he found some taxpayer money in some couch cushion or something to make a bridge loan to the institution against what was basically the certainty that they were going to be awarded the proper amount of money through the proper channels in the upcoming funding decision. I really think that this exposed the whole science funding system for the emperor with no clothes that it truly is.