Can A Job Be Reserved For Someone?

I was recently informed that a job was reserved for someone specific – before the vacancy was posted. It affects me in that I am one of the applicants for the job. Is it possible that there is something illegal taking place right before my eyes?
Part II of my question – who do I bring this up to – and when… my HR department, the EOE, or the Director doing the hiring (mine is an internal application). Do I bring this up now or after the recipient of the job is placed?