How NIST chose algorithms in the past was done in quite diverse ways. Sometimes they merely said "this is a standard" and people could comment and the comments were ignored. This is basically what happened with Dual EC DRBG, whcih is the likely example you're referring to.
However the way this standardization worked - and several others before, like AES and SHA-3 - is that NIST made a public competition. They basically asked everyone to submit proposals and then asked everyone to find flaws in theses proposals.
These competitions have a very good reputation in the cryptographic community. An algorithm like Dual EC where the issues were quite obvious would've never survived such a process.
The thing you should look at is the process, not the organization.