Paraguay’s Vice President Hugo Velazquez Moreno has said he will resign following allegations of corruption by the United States.

US Ambassador to Paraguay Marc Ostfield announced Friday morning that Velazquez was included in a corruption list for allegedly offering bribes to a public official. Velazquez has said he will resign next week so he can defend himself against the allegations.

“It really hit me like a bucket of cold water,” Velazquez said during an interview with a local radio station. “I don’t know what he’s referring to because he didn’t give too many details.”

The announcement has jolted the political scene in Paraguay, where Velazquez was a member of President Mario Abdo Benitez’s administration and was expected to run as a presidential candidate for the Colorado Party in next year’s elections.

Shortly after Ostfield made the announcement, Velazquez stated he was innocent but said he would drop his candidacy and tender his resignation to Congress next week.

Juan Carlos Duarte, a former prosecutor who is a close associate of Velazquez, was also included in the corruption list.

US Secretary of State Antony Blinken said that Velazquez had taken part in “significant corruption, including bribery of a public official and interference in public processes,” in a news release on Friday.

Specifically, Blinken alleged that Duarte offered a bribe of more than $1m to a public official in order to obstruct an investigation that threatened Velazquez and his “financial interests”.

Ostfield claimed that the designation has “nothing to do with politics” and that the US will continue to collaborate with the Benitez administration on areas of mutual interest.

As a result of the designations, Velazquez, Duarte and their immediate family members are banned from entering the US.

Velazquez has said he is “completely and totally” in the dark about the allegations detailed by Ostfield, and has said he will resign in order to “go out like a common citizen to defend what I think is an injustice”.

Duarte, Velazquez’s associate, is also legal counsel for the entity that operates the Yacyreta Dam, jointly owned by Paraguay and neighbouring Argentina.

“Duarte’s act of corruption abused and exploited his powerful and privileged public position within the Yacyreta Bi-National Entity, risking public confidence in one of Paraguay’s most vital economic assets,” the US Department of State said.

The allegations come several weeks after Paraguay’s former president Horacio Manuel Cartes was included in a US corruption list for involvement in “significant corruption”.

Cartes was in office between 2013 and 2018, and Blinken accused him of obstructing an international investigation into transnational crime “in order to protect himself and his criminal associate from potential prosecution and political damage”. The US also accused Cartes of ties to a terrorist organisation but did not offer specifics.