A bipartisan group in Congress is drafting US sanctions that would target leading Hungarian political figures tied to the Orbán government, as the relationship between the two countries continues to spiral downwards.

The sanctions bill would name former officials and government supporters, mostly affiliated with the Fidesz party of the prime minister, Viktor Orbán.

The legislation has been in preparation since last year and is expected to go before Congress as soon as next month where it is likely to draw broad support, according to officials familiar with the drafting process.

The sanctions bill, first reported by Radio Free Europe/Radio Liberty, is being drafted at a time of steadily worsening relations between Washington and Budapest.

Orbán was a close political ally of Donald Trump, and Fidesz maintains strong links with hardline US conservatives. This week, leaked Pentagon documents, based on intelligence, reported that the Hungarian prime minister had described the US as one of his party’s top three adversaries.

On Thursday, Hungary announced that it plans to leave the Russia-controlled International Investment Bank (IIB), a day after the US imposed sanctions on the Budapest-based institution widely referred to as Moscow’s “Trojan horse” inside Europe.

The treasury department had also announced punitive measures against the former IIB board chair, Nikolay Kosov, and two senior management officials, Georgy Potapov and Imre Laszlóczki.

Announcing its decision to withdraw its representatives from the bank, Hungary expressed frustration at the US pressure.

“We accept and understand that we represent different positions, but we don’t understand why pressuring other states to change theirs is necessary,” the foreign minister, Péter Szijjártó, said at a press conference. “Hungary is a state, therefore it should be treated as one, instead of a colony.”

A day earlier, the US ambassador, David Pressman, said that, unlike other Nato allies, the Hungarian government had ignored US warnings about the bank’s activities. “Hungary has dismissed the concerns of the United States government regarding the risks its continued presence poses to the alliance,” Pressman said. “We have concerns about the continued eagerness of Hungarian leaders to expand and deepen ties with the Russian Federation.”

Pressman has emerged as a lightning rod for tension in the relationship, and is frequently derided in pro-government media. “Mr Pressman is one of the least classy ambassadors ever to set foot on Hungarian soil representing his own country,” the parliamentary speaker László Kövér said on pro-government Hír TV last week. “He talks nonsense, and he does it aggressively.”

In March, Pressman went to Washington to consult the secretary of state, Antony Blinken, and senior White House officials. The US embassy said they discussed “recent developments” in the relationship with Hungary, “including uniquely anti-American rhetoric from senior Hungarian officials and pervasive anti-American rhetoric in the media controlled by the government of Hungary”.

Orbán is seen by his critics as Vladimir Putin’s closest ally in the EU. His government’s blocking of Sweden’s Nato accession has further soured the relationship with Washington and, until the end of March, Budapest had been delaying Finland’s bid to join, too. Hungary has also blocked Ukrainian participation in several high-level Nato meetings since 2017.

After Péter Szijjártó, the Hungarian foreign minister, visited Moscow to sign a series of energy deals on Tuesday, Politico reported that Oleg Ustenko, economic adviser to Ukraine’s president, Volodymyr Zelenskiy, said that Budapest’s new energy deals with Russia would only prolong the war in Ukraine. “If you’ve seen the video where Russians cut the head off a Ukrainian soldier, the Hungarians are paying for the knife,” Ustenko said.

The most recent state department human rights country report noted an alarming level of corruption in Hungary. “While the government took some steps to identify, investigate, prosecute, and punish officials who committed human rights abuses, action against high-level, politically connected corruption was limited,” the report said.

Transparency International’s corruption survey, the Corruption Perceptions Index, ranked Hungary as the most corrupt EU member state in 2022.

This is not the first time the US has placed sanctions on individuals close to Orbán. In 2014 Washington banned multiple Hungarian figures from entering the US, including the head of the national tax office, over concerns of corruption. On that occasion, however, the targeted individuals were not named.