I want to help these kids but don't know how.

This is so confusing - My daughter has a best friend who comes from a family that is very close-knit but very dysfunctional at the same time.  Her friend, let's call her Sue, has a brother, let's call him Tim, who has had an on and off girlfriend for several years.  He's 29 and she's 21.  Two years ago she had a baby by another man and Tim decided to take on paternal responsibilities and he is the only father this child has ever known.  She has now gone and had another baby, again by someone else, but Tim is still playing daddy.  I don't know why.  And yes, they are not his - they are of a different race.  Now comes the hard part.  She pawns off responsibility to everyone else, so I hear, goes out drinking and using cocaine, lived with a bunch of people who were like-minded, and the kids come at the bottom of her priority list.  She eventually got kicked out of her place for non-payment, and wound up living with Tim, his mother and three sisters with her two kids in a three bedroom mobile home.  From what my daughter says, she yells at the kids, slaps them, will strap the two year old into his stroller in front of the TV for hours so she doesn't have to deal with him.

Now, I'm getting this all second-hand from my daughter, who only visits there occasionally because it's too chaotic.  Usually her friend comes over here, and she does talk about it, mostly to my daughter.  I have strongly suggested to my daughter that she call CPS because the family won't.  It's not in their "code of honor" or something.  This woman has no relationship to them at all, but somehow they feel loyal or secretive or something.  My daughter feels she would be betraying her friend and her friend's family, even if it is an anonymous phone call.  My daughter, by the way, is 18, as is her friend. 

I'm worried about these kids. They don't deserve to live like that.  But I don't feel like I have any basis to call CPS since I have no firsthand knowledge.   I have been tempted to call anyway, though.  Those kids need a stable environment.  The older one I have met and he is intelligent and sweet, a normal two year old, but gets nothing but yelled at, even from the rest of the family they're living with, and I think "Tim" is OD-ing on the situation and getting just as impatient and abrupt as everyone else, from what I hear.

What would you do?