I was very surprised by the response from the institution. I wonder what the backlash will be with regard to those grants (NIH and AHA). Should this invalidate those grants?
In a world where grant funding is extremely limited, yes. Funding agencies are looking for any reason to reject a grant. I think the only reason to not retract the grant(s) would be the difficulty / practicality of doing so.
Nonetheless, this guy's PhD is practically worthless in this country. He will be unemployable and unfundable.
