A Pennsylvania judge yesterday upheld his previous decision that Lewis du Pont Smith, an heir of the wealthy du Pont family and a follower of political extremist Lyndon H. LaRouche Jr., is mentally ill and needs a guardian to oversee his finances.

Chester County Common Pleas Judge Lawrence E. Wood said that Smith, 29, who lives in Leesburg, Va., and does research for LaRouche publications, was not in possession of his faculties when he lent the LaRouche organization $212,000, all of it unsecured, last year.

Smith "has not made a knowing and voluntary choice to throw away his money on the LaRouche organizations," Wood said in a three-page decision. "Instead, his mental disorder has made him unable to resist their blandishments."

Smith's family, from Paoli, Pa., had sought the ruling to keep him from giving his money to the LaRouche group.

Wood rejected arguments by Smith's attorney that the judge's previous decision eight months ago, finding Smith "mentally ill" and naming a guardian over his $1.5 million in assets, was unfair because it denied his rights to free speech and free association.

"It is not that kind of case," Wood wrote. Instead, the main issue was "whether Lewis, because of a mental illness, was likely to become the victim of designing persons . . . . Lewis' First Amendment freedoms remain intact, and he may exercise them as foolishly as he wishes."

James Crummett, Smith's lawyer, could not be reached for comment on whether he would appeal.

The decision means Smith has little access to his funds except for $5,000 a month.

Guardianship cases in Pennsylvania are two-tiered, and yesterday's ruling was the final part of Wood's decision to name a guardian over Smith's funds. Last month, Wood turned down a request by Smith's family to name a guardian over him personally. Such a guardian could have removed him physically from the LaRouche people.

Wood had based his conclusion that Smith is mentally ill partly on Smith's statements supporting the apocalyptic message of LaRouche.

Wood also ruled yesterday that the guardian over Smith's money, the Wilmington Trust Co., can file suit against a LaRouche group to collect approximately $192,000 that Smith had lent the group but had not been repaid. Smith opposed the guardian's request to file suit, saying he doesn't care whether the LaRouche group repays him.