Police made no allegations Friday that the boys had been victimized by Steve Powell as part of his 2,000-image collection of explicit videos made of women and girls including Susan Powell without their permission. But they said they've only viewed about five percent of the pictures and are still investigating.
Steve Powell, 61, pleaded not guilty to 14 counts of voyeurism and one count of possessing depictions of minors engaged in sexually explicit conduct Friday. He was being held on $200,000 cash-only bail.
Seattle's KIRO-7 reported that Steven Powell had been fired from his job at the state Department of Corrections. He'd worked as an account executive with Washington Correctional Industries selling furniture built by inmates to school districts, the station reported.
Josh Powell, meanwhile, said in recent court filing that his wife left their family willingly and may have committed suicide.
"I did not kill my wife. I have never abused her. I have cooperated with law enforcement in investigating her disappearance," he wrote in court documents.
He told an Associated Press reporter at a Friday court hearing on the custody of his sons that the allegations against him are untrue.
"Everything they said is patently false. I am a good father to my sons," he said.
A future hearing in the child custody case was set for Wednesday.
Steve Powell allegedly focused on the private parts of women while filming them in public and aimed a telephoto lens into his former neighbors' windows to take images of two girls, ages 8 and 10, in the bath or getting undressed, according to charging documents. The images found by police which also included graphic photos of himself masturbating were organized into detailed files with names like "Taking bath-1," the documents state.
The 14 felony counts are based on separate incidents of the girls recorded in the bathroom, prosecutors said. Steve Powell taped his daughter-in-law in her clothing but those images were "creepy" rather than criminal, said Pierce County Prosecuting Attorney Mark Lindquist.
Steve Powell's neighbors on Friday night said they were shocked and rattled by the allegations. They said they had no idea he was taking photos or shooting video.
"I was surprised," said neighbor Debbie Early. "I've known him almost the whole time [I've lived here] and I never thought he was weird like that. He seemed like a nice guy."
Police said Friday the arrest was not connected to Susan Powell's disappearance, but the evidence against Steve Powell was found when West Valley City police searched his Puyallup, Wash. home last month looking for clues in her disappearance.
Also Friday, West Valley City police wrapped up another search for signs of Susan Powell in Utah, near Topaz Mountain in Juab County. During the 12-day search, they discovered charred wood buried where cadaver dogs indicated the presence of human remains. That wood is being examined and it's unclear if there is any connection to the Susan Powell case.
In recent weeks Josh Powell has made appearances in the media, along with his father, saying his wife may have run away with another man. Steve Powell also has said his daughter-in-law was "very flirtatious and very sexual" toward him.
Thursday's arrest puts those allegations in a new light, said Susan Powell's neighbor and friend Kiirsi Hellewell, saying Steve Powell fabricated a fantasy that his daughter-in-law was interested in him.
"Any credibility they have is gone," she said of Steve and Josh Powell.
Susan Powell had felt uncomfortable around her father-in-law since he attempted to kiss her while she and her husband were living in the Powell home as newlyweds. He later sent her pictures of naked men and offered to "share her" with his son, Hellewell has said.
Steve Powell's estranged daughter, Jennifer Graves of West Jordan, said Friday she wasn't surprised to hear about her father's arrest. Growing up, she and her siblings would stumble across pornography, she said. As an adult she decided never to leave her father alone with her own children.
"I think [the arrest] is a good thing because it limits his ability to hurt people," she said. The neighbor girls he filmed "have been abused and taken advantage of."
In comments to reporters, Chuck Cox echoed that sentiment, saying Steve Powell's alleged voyeurism shows his daughter was justified in feeling uncomfortable around her father-in-law.
"I think it's disgusting," he said. "I'm relieved the children are no longer in that household."
The Coxes wrote in their custody petition that they're ready and willing to assist investigators who want to interview their grandchildren about Susan Powell's disappearance. They cite a May 2010 visit with Chuck Cox's elderly parents when Suan Powell's then 3-year-old son looked at a photo of a woman in a magazine, pointed at her chest and said " 'mommy oucheey.' "
The Coxes wrote that they have seen their grandsons only a handful of times since Josh Powell moved them back to Washington. Their hopes of having any more contact with the children ended completely in late July after an encounter at a Lowe's home improvement store in which Josh Powell has argued Chuck Cox threatened him. Chuck Cox has denied that allegation.
Amid exhaustive media coverage of the case, relations between the Coxes and the Powells have devolved so much that a judge issued a restraining order requiring both families to stay 500 feet away from each other.
Susan Powell's sister Denise Cox, attended Steve Powell's arraignment and said she thought it was a mistake to grant bail because Steve Powell could be a flight risk.
"I'm just waiting for the day when hopefully Josh will join him [Steve]," she said. "I want to know what happened to her. I know she didn't run away. I just want this all to come to a close."
Josh Powell has said he took his sons camping near Simpson Springs in Tooele County, Utah, on Dec. 6, 2009 and when he returned there was no sign of his 28-year-old wife. Police have named him as the only person on interest in the case, and have said he is no longer cooperating with their investigation.
Even though the crimes Steve Powell is now accused of aren't directly related to Susan Powell's disappearance, the arrest could give investigators some leverage in the nearly 2-year-old case, said Salt Lake City defense attorney Greg Skordas.
If Steve Powell does know something or can provide West Valley investigators with a new lead, "he could use in exchange for some sort of break on his own case," Skordas said. "He's never had any incentive to help them solve the Susan Powell disappearance, now he has."
Melinda Rogers, Brooke Adams, Janelle Stecklein and Bob Mims contributed to this report.