It sounds like you have a friction hold-open arm, and somebody lubed the friction hold-open knuckle. Because this kind of hold open works due to friction, and the purpose of lubrication is to eliminate friction - well, you can see the problem.
Hopefully you will be able to download a parts breakdown of your door closer with enough detail to see if the hold open knuckle on your closer can be disassembled. If you can disassemble it, try removing the lubricant from all parts using a small amount of solvent (like turpentine) and a rag. If you cannot get inside the knuckle to do this, try to clean it as much as you can from outside, and then use a heat gun on a low setting to dry it out. That might work.