The new law requires multiple reforms at the SIC, including changing the makeup of the council, and was signed into law last week by Richardson. The law mandating changes at the SIC follows the agency’s emergence as a hotbed of questionable practices that led to a federal criminal probe and a federal securities inquiry.

“Catherine Allen and Doug Brown bring valuable financial and investment experience and a fresh perspective to the new State Investment Council,” Richardson said in the statement.

Brown is no stranger to Richardson. The governor appointed Brown in late 2005 to serve out the term of former state Treasurer Robert Vigil, who eventually went to federal prison on an attempted extortion conviction.

In his statement the governor went on to thank the former SIC board members whom the governor appointed but who were removed when the new law took effect last week.

“I want to thank Andrew Davis, Stephen L. Feinberg and Peter B. Frank, who served the state of New Mexico during challenging times,” Richardson said in his statement. “These men played an important role in helping us to reshape the council and provide more accountability to the state’s investment process.”

Under the new law, the State Investment Officer — the agency’s top staff member — is no longer on the SIC board and the board expands from nine to 11 members.

The removal of the State Investment Officer from the board comes after allegations that Gary Bland, the former State Investment Officer, resigned last October after several SIC members pushed for a no-confidence vote. Later, State Land Commissioner Patrick Lyons told the Associated Press that an internal inquiry had uncovered evidence that Bland had “pressured investment firms doing business with the state to hire certain third-party marketing or placement agents.”

Five of the SIC’s members under the new law serve on the board due to the offices they hold. Those include Lyons and State Treasurer James Lewis.

The remaining six SIC members are appointed by the governor and legislative leaders.

Richardson gets two appointments, which went to Allen and Brown. Legislative leaders get the remaining four appointments. They haven’t been announced yet.

The search for a new investment guru comes days after Gary Bland resigned from that high-profile position amid a growing scandal over investments made by the State Investment Council (SIC) and the Educational Retirement Board.

A private law firm hired by the SIC found that Bland had “pressured investment firms doing business with the state to hire certain third-party marketing or placement agents,” state Land Commissioner Pat Lyons told The Associated Press last week.

Bland’s resignation preceded by a day an emergency meeting of the SIC at which members were expected to take a no-confidence vote in Bland.

Lyons’ public disclosure pulled Bland into the center of the national pay-to-play investment scandal that has rocked New York and New Mexico. Already, Saul Meyer, the former investment adviser to New Mexico’s SIC and Educational Retirement Board, has admitted to recommending “investments that were pushed on him by politically-connected individuals in New Mexico.”

Lyons declined to identify the third-party marketers, telling the AP last week he didn’t want to jeopardize ongoing investigations by the U.S. Attorney’s Office and Securities and Exchange Commission.

The third-party marketer who has received the most attention in recent months is Marc Correra, the son of a big supporter of the governor and a man who shared in $22 million in fees for helping investment companies win contracts in New Mexico. Correra’s attorney has said Correra did nothing criminal.

Richardson named Bob Jacksha to replace Bland as interim State Investment Officer during the search. Jacksha, who currently serves as Chief Investment Officer for the Education Retirement Board, previously served as Deputy State Investment Officer for the State Investment Council, the governor’s office said.

This isn’t the first time Richardson has tapped Brown for public service.

Richardson chose Brown as a replacement for Vigil, who resigned as state treasurer in 2005 after being indicted by the U.S. Attorney’s Office. Vigil is currently serving time in a federal prison after he was convicted of attempted extortion.

Brown is currently the Dean of the University of New Mexico’s Anderson School of Management.

“Doug Brown has a history of unselfish service to the state and I appreciate the fact that he is willing to head the search for one of the most important positions in state government,” Richardson said in a press release.