I have a lot of anecdotes in my field and experience on how true this is.

For example, a former colleague used to review papers in his field but way outside his specialty. He approved or rejected based on him asking his former advisor who happened to be the editor.

Right in front of me, a former department head of mine would tell a (then young) colleague to put “experimental” data there, and there and there on a theoretical plot. The Department Head was the “experimental-side” co-author and my (then young) colleague the theoretical side. Their papers got regularly accepted because the department head was well-connected.

I once told a former mentor (very influential person) about a famous person who stole my work which was published several years before. That famous person told me to my face when confronted that he knew of my work and he just re-branded it and popularized it. My mentor told me to keep quiet because that person can destroy my (then starting) career.

… many, many more stories from my own experience and others I know.

It’s a racket. The problem is the pressure that is put on faculty to publish. It causes so much corruption and distortion. In my opinion and experience, you can publish well when your friends or members of your cabal become editors. It seems to me that very few designated reviewers actually do a conscientious job. Too much pressure, wrong incentive structure and too little time. Many just forward the work of reviewing to their students or postdocs …

In this article, the authors describe how they used SCIgen (software) to create bogus papers written by a fictitious author. "For a time, 'Ike Antkare' ranked 21st on the database's list of most-cited scientists in the world—higher than Einstein, who ranked a lowly 36th.”

http://phys.org/news/2014-02-science-publisher-gibberish-papers.html

What is the alternative to peer-review? Publish everything on the internet and use a system like the one used by stackExchange or experiment with several alternative systems where readers and users give feedback.

The better solution? Change how funded research gets done. Change how universities work and what they depend on for their income. Somebody who really has something to write will do so anyway. It will drastically reduce the trash, fraud and plagiarism that gets published nowadays.