Susan Powell's children to stay with her parents, not husband

(CBS/KIRO/AP) TACOMA, Wash. - The children of missing Utah mother Susan Cox Powell are now in the care of her parents. A Washington state judge plans a custody hearing Wednesday to determine whether the boys should stay with their grandparents or be returned to their father, Josh Powell. An assistant attorney general says Powell is a subject in a child pornography and voyeurism investigation.

Pictures: Missing Utah mother Susan Powell

The boys had been living with Josh Powell and his father Steven. When it was announced that Josh was also the subject of the investigation, he quickly denied wrong-doing.

"I have had nothing to do with any kind of illegal pornography," he said.

Josh Powell is a person of interest in the disappearance of his wife nearly two years ago. He has not been charged.

Chuck Cox's attorney, Steven Downing, told the judge that the children were being harmed because they never received counseling about their mother's disappearance. They may have also been exposed to the inappropriate videos and they had been cut off from their maternal grandparents without explanation.

Powell countered that he's a good, loving father and that the children are not at risk. He also made clear that his family would not be posting bail for his father. Additionally, if Steve Powell somehow managed to return home, Josh Powell said he would then take the boys and stay at a hotel.

Pierce County Sheriff's Office spokesman Ed Troyer said investigators have not ruled out anyone in the case who lives in the Powell house but Steven Powell is the only suspect.

Steven Powell was arrested last week and charged in connection with videos that were found during a search of the home. The boys were placed in foster care after the arrest and Chuck Cox immediately filed for custody of the children.

Steven Powell pleaded not guilty to 14 charges of voyeurism and one of possession of child pornography. He remains jailed on $200,000 bail. Prosecutors said that for at least a decade, he had been secretly filiming women, including Susan Powell. He also shot footage of two young neighbor girls as they took baths and sat on the toilet.

During Tuesday's hearing, the judge said she didn't have jurisdiction over the case because the children are in state custody, so she granted temporary custody to the Cox family so she would then have jurisdiction over the case.

Court was scheduled to re-convene Wednesday morning at 9:30 a.m. when the judge may make a final ruling.

Susan Powell was 28 when she was reported missing Dec. 7, 2009, after she failed to show up for her stockbroker job. Josh Powell has said he took his boys on a late night camping trip in freezing temperatures the day his wife dissappeared from their West Valley City, Utah, home.

Complete coverage of the Susan Powell case on Crimesider