That's the question posed by Slate.
From the piece...
I talked to some of the players in that surprising decision, hoping to find out how The Moviegoer
was crowned and whether it is true, as alleged, the novel won thanks
only to shady backroom politicking. Percy’s victory set off a
controversy that involved the most powerful man in publishing, a famous
journalist eager to take credit for the award, and a cub reporter who
would go on to become one of the most celebrated writers of our time.
Catch-22 was considered the favorite, and yet Percy’s
greatest opposition, ironically, came not from Heller or any of the
other nominees but his own publisher, Alfred A. Knopf. When the
charismatic, mercurial founder of the house that bears his name learned
it was Percy the judged had tabbed, he exclaimed, “They’re running the
prize into the ground!” Knopf, who had been in the business since 1915,
was known for his acuity and taste, for taking a chance on authors other
publishers were loath to sign but later wished they had. He had failed,
though, to recognize Percy’s talent, and had recently fired Stanley
Kauffmann, the editor who acquired The Moviegoer and worked
with Percy through four rewrites. In the days before the winner was
announced Knopf endorsed another one of his books, The Château by William Maxwell, and knew it reflected poorly on him to be seen missing the mark so widely.
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