MOSCOW—Wednesday night the Russian art world gathered for an evening of pomp, performance, and kitsch, as the Kandinsky Prize held its second annual awards ceremony. “Art and Power” was the theme of the event, but with the art world mired in financial uncertainty, many in the audience saw more irony than confidence in the title. Indeed, there is some concern that the evening may have been a swan song for the two-year-old award, which recognizes winners in three categories — Best Young Artist, Best Media Artist, and Project of the Year. The driving force behind the prize, art collector and Art Chronica magazine publisher Shalva Breus, remains committed to the prize and hopes that it will continue. But rumors were flying that the prize’s sponsor, Deutsche Bank, would soon withdraw its support.

The evening started inauspiciously. Outside the entrance to the Winzavod Art Center, where the event was being held, a group of about 10 socialist activists protested the nomination of controversial Moscow artist Alexey Belyaev-Gintovt. One of the rare art-world figures to openly support the current Russian government, Belyaev-Gintovt has provoked outrage with his depictions of symbols and iconography associated with neo-Stalinist ideology (a red star on a Kremlin tower, images of youth striking heroic, quasi-fascist poses); it’s unclear, however, what exactly the artist intends with the imagery: His paintings gleam like jewelry and appeal more to the glamorous set than to the ideologically minded.

Last year’s ceremony opened with a live rendition of the Blue Noses collective’s controversial photograph The Age of Mercy, in which two Russian policemen kiss. On Wednesday, the same two actors were on stage, this time dressed as French cops for a satire dramatizing XL Gallery’s run-in with French customs over its display of lurid photos by Oleg Kulik at the FIAC fair. Although XL director Elena Selina said that she took no offense to the performance — in which sex-shop rubber dolls represented the Russian gallerists — most attendees agreed that it was in extremely bad taste.

Next up was philosopher Boris Groys, who took the stage and warned the public: “The art world isn’t politically homogenous. When there’s political thinking involved, we’re on shaky ground.” Later in the the evening, the Yugoslavian performance artist Marina Abramovic and the Chinese artist duo the Gao Brothers staged separate performances, drawing much applause.

Dinos Chapman was on hand to present the Young Artist prize, but first he showed a hilarious video about the deaths of famous artists. Van Gogh, Jackson Pollock, Andy Warhol, and “Richard Serra’s assistant” were played by rubber-glove puppets filled with fake blood. At the video’s conclusion, Chapman encouraged the parents in the audience to show the work to their children as a warning about what a career in the arts entails. Then he gave the prize to Diana Machulina, a 27-year-old painter and installation artist, who used her speech to condemn political extremism in contemporary Russia. “Art is concerning itself with politics because it fears that politics will come for the art,” she said.

The PG group, the Moscow-based arts collective that made headlines in 2007 when some of its photo-collages were censored from the controversial “Sots Art” exhibition in Paris, was named the media artist of the year for its dystopic series depicting a bleak Russia following an imagined Chinese takeover.

At the evening’s conclusion, Groys stepped up a second time to announce the Project of the Year award, which went to Belyaev-Gintovt for his “Motherland” series. The audience erupted into both cheers and boos, and last year’s winner, Anatoly Osmolovsky, stood up from his seat and led the room in chants of “Disgrace!” But as the cameras turned to him, one wondered if his outburst was spontaneous or premeditated. In the end, the ceremony left behind a bitter aftertaste and a question of how sincere and high-minded artists actually are when they take on politics — a topic that, in Russia anyway, will always win you attention.