Character can show up in someone's practice manner and performance of technique. However, there are many examples of people that have gotten promoted anyway.
Check out David Lynch's essay "Sex, Lies & Aikido Senseis":
http://www.aikidojournal.com/article...ArticleID=1135
Exploits of high level instructors and shihan that show less than desirable character are well known among the world aikido population.
Regards,