By Ezequiel Minaya
Of DOW JONES NEWSWIRES

CARACAS (Dow Jones)--Opposition legislators in Venezuela have been blocked in the national parliament from discussing the apparent use of the state oil company's pension fund in a Ponzi scheme run by a former financial adviser to Petroleos de Venezuela, or PDVSA.

A proposal to bring the matter before the National Assembly was rejected last week by the ruling-party majority. "We will keep insisting," Assemblyman Cesar Rincones said.

Rincones added that opposition lawmakers would continue to petition Venezuela's attorney general to open a probe into the case.

"I think that it's amazing that no one in the government is talking about it," said Russ Dallen, an analyst at Caracas-based BBO Financial Services. "There is only silence."

Francisco Illarramendi, a Connecticut-based financial adviser who previously worked for PDVSA, admitted to U.S. prosecutors earlier this month to paying fraudulent returns with new investment funds and of trying to mislead investigators by fabricating evidence.

It is believed that a significant portion of the PDVSA pension fund made up most of the hundred of millions of dollars that Illarramendi juggled between several hedge funds while hiding losses.

One of those funds purportedly held up to $540 million in assets but, due to misappropriation and Ponzi activity, "the funds hold assets worth substantially less than that amount," the U.S. Securities and Exchange Commission has said.

As news of the developing investigation in the U.S. reached Venezuela earlier this year, opposition lawmakers pressed Venezuela's oil minister, Rafael Ramirez, during an annual address he delivered before the National Assembly.

Ramirez sidestepped hostile questioning and said PDVSA's leadership doesn't directly manage the pension, insisting it was controlled by the company's 90,000 workers.

Opposition lawmakers alleged that Ramirez lied and have called for an accounting on the handling of the pension from Ramirez and the head of PDVSA's finance department, Eudomario Carruyo.

A call seeking comment from PDVSA officials wasn't returned