I am utterly shocked not only by the counsellor who said he/she can't report based on heresay (that is entirely untrue, it's not for the reporter to know whether something is true or not, only to suspect there might be an concern that needs investigating) but also by CPS who has decided there isn't a case without even speaking to the child.
Most certainly a child witnessing a parent masterbating in a child protection issue. The porn is a "little" less worrisome in the mainstream since theoretically it's entirely possible that it was an accident, assuming it wasn't child porn. Adults are permitted to look at regular porn but a child being exposed to it is absolutely a child protection concern- the first time would likely be a warning.
This is highly irregular and very concerning. This is my field of work and I am utterly shocked that the children have not, at the very least, been questioned.
MTA- I understand you worry about a case being unfounded and wanting to be sure you have enough to get him, lest you look like you are trying to keep the children from him, which could back fire big time.
Amazing that a mom can get arrested for letting her 9yr old to to the park alone but this kind of nonsense goes on!