Hello there,
My father is a MA2 in the navy. His Assistant Security Officer's Sister recently married Chief of Police and making them brother in-laws. Both of them are E-7's but the Assistant Security officer is in charge of the Chief of Police. I want to know if there is a conflict of interest here? Should they be in the same chain of command still?
Thanks

There is no law against it. It might not be a good idea to have people in positions like those, and sometimes there are policies against it, but it can be done. Usually it is not too uncommon.