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Nortel

(NT)

shareholders got two pieces of good news Wednesday: Former Canadian finance minister John Manley joined the board; and Paul Sagawa, the Sanford Bernstein analyst and a classic weak hand, downgraded the stock. Lots of irony here: Manley joined the board after doing a thorough check and realizing that the company is going to come out of this jam whole, and Sagawa downgraded it because he thinks the publicity from all of the class-action suits and prosecutions is going to leave things less than whole.

I back Manley. Here's why.

First, Manley didn't need to join the board. He's like a Bob Rubin figure up in Canada; he can do what he wants.

Second, if Manley wanted to, he could have waited to see the results of the audit and then joined the board. I am sure he would have been welcomed then and wouldn't have the risk he faces now that things could turn out badly.

Third, Manley talked to Bill McLucas. There are lawyers who do bogus internal investigations, and then there are lawyers like Dan Webb, who did the Dick Grasso investigation, and Bill McLucas, who did the WorldCom investigation. These guys are tigers. They exist to find bad things and publicize them. They are not "for sale." Their opinions matter. Their investigations matter. These are people who pride themselves on not "whitewashing." When I saw that Bill McLucas was doing the investigation, he of Wilmer Cutler & Pickering and former head of enforcement at the

SEC

, I realized immediately why Nortel's former CEO Frank Dunn had to go -- McLucas probably demanded it. He has no tolerance for corruption or for those who looked the other way when corruption occurred; they're the same thing to McLucas. He's tough as nails and scary to the bad guys. He's the guy cleaning house.

The

Toronto Globe and Mail

reports that Manley joined the board after meeting with McLucas. I can tell you that McLucas is Mr. Worst-Case-Scenario. And after hearing the worst case, Manley still joined. That's downright encouraging.

One of the Nortel bears told me Wednesday that he felt Manley might be getting brought in to salvage the company and that it could be "window-dressing." To which I say, "Still, why come in now?" Why not wait until after the investigation and the audit are finished? It isn't like anyone cares; people have written off this company entirely. I asked the bear whether he was going to short more and he said, "No, because Sagawa threw in the towel and that was an important bottoming moment." Unfortunately, if you use that scale, there are four more bottoming moments ahead.

I don't believe it, though. I think this is the real deal. I'm anxious to get my Nortel position to 75,000 shares before the full audit comes out. I'm giving you readers notice that I might take action as early as today.

At the time of publication, Cramer was long Nortel.

James J. Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made.

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