(FORTUNE Magazine) – Back in the spring of 2000, WorldCom founder Bernie Ebbers derided analyst Scott Cleland, 42, as an "idiot" in FORTUNE for predicting the failure of the proposed WorldCom/Sprint merger.

Fast-forward two years: Ebbers is out as CEO. WorldCom has admitted to a $3.9 billion accounting snafu. And Cleland, founder of the 28-person Washington, D.C., research outfit Precursor Group, doesn't look so dumb after all. Not only was Cleland right about the Sprint deal, which the Justice Department ultimately blocked, but he was ahead of the pack in raising questions about WorldCom's debt, profitability, and survival. "Scott is not at all afraid of taking very provocative and in some cases extreme stands," says Erin Spatz, an analyst with asset-management firm Standard Life Investments.

Although Cleland sells his research to mutual funds and other investors, he doesn't issue stock recommendations. And as the founder of a trade group that promotes independent analysis, he is a wee bit fanatical about conflicts of interest. ("I should tell you I'm a Republican," he says. His tenure as an aide to former Secretary of State James Baker was a good clue.)

Cleland, whose deliberate speaking style suggests he's editing his sentences as he's talking, says his Washington experience helps him see the big picture. "I'm looking for changes that the market currently doesn't appreciate." In the case of WorldCom, he realized the Sprint merger was in trouble when the Justice Department hired a tough antitrust lawyer. Talking to 35 antitrust experts confirmed his view. By June 2001 he was calling WorldCom's business approach a "dead model walking."

But Cleland isn't comfortable with comparisons to Jim Chanos, the short-seller who first raised questions about Enron. In fact, he claims he's never shorted--or even owned--an individual stock. With the way the market has performed lately, that makes Cleland look even less idiotic.