By early 1991 Gorbachev and his crew finally found a solution to their problem: the referendum. Soviet constitution had a provision similar to Swiss one: results of public referendum would become legally binding upon official declaration of the results. If a majority of voters approve for a motion that USSR is a federation, that will make laws of the federal government of the USSR binding to the constituent republics. Thus, a successful referendum can override the declaration of sovereignties and assert Gorbachev power over the Yeltsin and other republican leaders.
Armed with this knowledge Gorbachev immediately announced a referendum to settle the issue.
However, Gorbachev was reasonably concerned if people would really approve such a motion, should it be put on referendum. Because of that he decided to sweeten the deal and add various promises that would make people more likely to vote yes. The final wording that Gorbachev put to a vote was as follows: "Do you support preservations of the USSR as renovated federation, where rights and freedoms of person of every nationality would be fully guaranteed?" The odd word 'renovated' is equally confusing in Russian version of the text, it could mean both 'rejuvenated' or 'reformed'. Because of that voters were reasonably puzzled if they voted for continuation of USSR or its reform.
Organization of the referendum immediately stumbled into problems. Baltic states, Moldova, Georgia and Armenia downright refused to organize the referendum on their territory, claiming that they opted for independence and will not vote on preservation of the USSR.
All three Baltic states (Lithuania, Latvia, Estonia) also announced that they will be holding their own republican referendums on their independence, before the federal one could be organized, with much less ambiguously worded question. Georgia and Armenia also did so, but only after the federal referendum. Gorbachev counteracted that referendum on preservation of USSR would still be organized for these republics in facilities controlled by federal government, such military bases and encouraged people to attend and vote there. Baltic republics parries by calling people to ignore the Gorbachev's referendum.
Even those republics who agreed to hold the referendum on preservation of USSR, sometimes added extra questions to the ballot. For example, Ukraine and Uzbekistan added the second question on whether their republics should only be part of the union on the basis of their declarations of sovereignties, that is with their republican laws still holding precedence over the federal ones.
Surprisingly enough Yeltsin and RSFSR did not add such a question to their referendum. Instead, Yeltsin added a question of creation of office of President of RSFSR and holding an election if such a motion is approved. That partly mirrored the Gorbachev's move to create office of President of the USSR, however unlike Gorbachev, who gave himself first 5-year term as president for free as part transitional arrangement, Yeltsin did not and instead decide to organize an election.
On referendum day people voted yes on all questions. That could have given a Constitutional Court a lot of a headache on how to interpret these clearly conflicting results, but future events made it irrelevant.
In Baltic states for example many voted in republican independence referendum in favor of independence. Some however visited military bases to vote in federal referendum instead. Independence referendums however attracted a clear majority of voters in these republics, so they could be considered valid. In contrast less that 1 percent of voters voted in federal referendum in Armenia, in places like Estonia and Latvia its attendance was around 20% but still clearly short of what independence referendum attracted.
Gorbachev still announced that all republics have voted to preserve the Union. Some USSR supporters still point to this referendum as ligitimate expression of people's will to stay in USSR.
Afterwards jubilant Gorbachev, confident in his victory, invited all republican leaders to a conference to sign a new union treaty and create the newly renovated and clearly federal Union of Soviet Sovereign Republics with himself as President.
However, the process did not went as planned and later became known as Novo-Ogoryovo process.
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