Josh Powell Loses Custody Battle to Susan Powell's Parents

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Josh and Susan Powell's children will remain in the custody of her parents because of a dangerous home environment with sexually explicit material and because of the possibility that Josh Powell participated in the voyeurism and child pornography charges against his father, a Washington court ruled today.

The hearing came after the children were removed from the home of Josh Powell and his father, Steve Powell, amid Steve Powell's arrest on 14 counts of voyeurism and one count of child pornography. The father and son lived in the home following Susan Powell's disappearance in December 2009 until the charges were brought.

The state's attorney told the judge that during a search of the home in August, police saw a poster depicting a woman with a sword through her genitals and found a hanging noose, and that on other occasions they had arrived at the home to find Josh Powell's brother naked when answering the door.

The lawyer added that Josh Powell admitted to investigators that he had taken photos of women's legs without their knowledge, in addition to having stored some of his father's information on his personal computer.

Fifteen computers were seized from the home during the search, part of the ongoing investigation into Susan Powell's disappearance. The police found thousands of photos and videos of women and children, including images allegedly taken by Steve Powell from his bedroom window of girls as young as eight and 10 years old.

Police said the charges against Steve Powell represented only the first findings of what was on the 15 computers, and that Josh Powell was also a subject of the investigation.

Josh Powell contended that the allegation about the poster was false, and he had only heard of police seeing his brother naked as he left the restroom once.

Powell added that the 15 computers seized were mostly old and had nothing to do with pornography but were part of his career as a software developer. He said the noose was actually an exercise handle, a photo of which he had sent to the judge.

Despite Josh Powell's pleas, the judge ruled that the home was not safe for children and that the children would remain in the custody of Chuck and Judy Cox, Susan Powell's parents.

Josh Powell argued that foster care would be better for his children than living with the Coxes, but the judge denied his suggestion.

Josh Powell agreed to undergo a psychological evaluation as part of the process to get his children back, and the children were to receive state-mandated counseling.

A court status review is scheduled for November, and then potentially a trial for custody.

The judge granted three-hour visiting periods on Sundays for Josh Powell to see his children while the Coxes are at church. Josh Powell objected to the children going to church with their grandparents.

Steve Powell's Marriage Crumbled Because of Porn

Court documents obtained today by The Associated Press suggested that Steve Powell's marriage ended in part because he inappropriately discussed sex with children and kept pornography in his home.

In the court documents, Steve Powell's ex-wife, Terri Powell, wrote that Steve Powell talked of teaching his children about birth control methods when they were as young as 9 years old.

Terri Powell's sister, Becky Mulcahy, wrote in the documents that Steve Powell told her that he had shown his youngest children books about sexual intercourse when they were 6 and 8 years old.

Terri Powell said her husband viewed people as animals and that they should be able to have sex with anyone at any time. She recalled a conversation in which Josh Powell referred to a girl his brother, Johnny, liked.

"All she is good for is her body, right dad?" Terri recalled Josh Powell saying.

"Yeah, that's right," Steve Powell replied, according to the declaration.

Terri Powell added that Steve Powell kept hardcore pornography in the home and that he visited pornography shops.

Jennifer Graves, Josh Powell's sister, said in an interview with The Associated Press that she broke off ties with her father in part because of his problems with sex and pornography. She recalled going on a business trip with her father when she was about 11 years old and that he viewed a pornographic video while she was with him.

"Looking back, I wonder: If he was willing to do that with a 10 to 12 year girl, his daughter, in the room, what else would he be willing to do?" she said.

Steve Powell is being held on $200,000 bail.

Chuck and Judy Cox 'Giddy' Over Decision

The attorney for Susan Cox Powell's parents said today that they are thrilled to have been awarded custody of her children, saying that the missing woman's father, Chuck, was "giddy" that the boys were safe with them.

"I've never seen or heard him that way before," attorney Ann Bremner told "Good Morning America" after the Coxes were awarded temporary custody Tuesday, a ruling upheld today. "It's a fantastic results of pretty tragic and stunning developments of this case.

"It's important to note that grandparents don't have rights with respect to custody," Bremner said. "And this changed because the state got involved and took them into protective custody. So Chuck and Judy will have their grandsons and they're safe and loved."