Unreal, I don't doubt that you believed your sister right away and I'm very glad to hear that you've told her she's not to blame. I'm also relieved to hear that she is in IC. Just don't be surprised if she changes her mind about wanting your husband around in the future. I highly suspect that as she gets an IC's perspective and stops blaming herself for being a child victim, she will get angry at him and at your parents too for not protecting her. In a way, that's a good thing because anger fuels a person's desire for change and if she doesn't want to keep being blamed, guilt tripped, and hurt by your parents, she will need to change either by setting boundaries with them or limiting/cutting contact altogether. I know that you don't want to blame them because they're your parents and you love them but unfortunately that doesn't change the bad choices they've made and it doesn't stop them from continuing to hurt her with their current choices today. Nor would it hurt you any less if you do divorce and they continue to put your husband above you.
Even though it is my opinion that your husband doesn't necessarily fit the textbook example of a pedophile, I do think that you should keep your eyes open and err on the side of caution. I do believe that your children have a right to know. There is still the possibility that your husband has not been honest when he says she is the only one. There is the possibility that he's made a pass at one of your kids' friends that you don't know about. 20 years is a long time for him to go on thinking that what he did "wasn't that bad" and that your sister was somewhat receptive or deserving of what happened.
By seeing how terribly this has impacted your sister and having been a victim yourself, I hope that you can agree on two things:
1. You can't be too careful when the stakes are someone's life being severely impacted. Many children's lives have been ruined from molestation and abuse even if it only happened once. Even you THINK there's only a 1% chance that he did it or would do it again, that's still not a good reason for you not to be proactive in preventing it from happening through exposure.
2. Keeping the secret from them is doing exactly what your parents did to you. Didn't feel so good, did it? What do you think would happen if your adult children find out later that you hid this from them? Will they question YOUR ability to be a good grandparent when you protected a predator? Will they blame YOU for keeping quiet if another incident happens? Even if nothing happens and they find out by accident through your sister, your parents, or one of the many other people who know and could accidentally say something, this will forever negatively impact your relationship with them and their trust in you even if you decide to D your husband. Don't you think it would be a little hypocritical to keep this from them?
Ellie does have a great point about how your view of normal has been skewed by your experience as a victim and I'd like to touch a little more on that. I believe your view of family dynamics and what constitutes as healthy has been severely impacted by your parent's influence and choices. Even if you didn't fully understand them or know about them. In your family, keeping secrets is the norm. Covering up for someone else is the norm. Even at everyone else's expense. If you want that to change, if honesty is important to you and the basis that is required for a good and healthy relationship from your perspective, that authenticity has to start with you. Which means no more secrets. It means NOT hiding this from your adult children in order to cover for your husband.
There's something else that is important for you to understand - in situations of abuse, you CAN'T protect everyone. Your choice to protect one person almost always puts another at risk. That can be a good thing if you protect a victim by exposing an abuser. Or that can not so good by thinking you're protecting your children by not telling them when actually you're protecting your husband and putting them at risk. Again, that COULD be a small risk but it's a risk none-the-less. It's also a risk to yourself for being outed as a co-conspirator if you get exposed. It's a risk to yourself if you find out he is lying and has made a move on another girl or he does it again because the guilt you will feel will eat you alive. Ask yourself - is the risk worth it? Is them not hearing the truth from you worth all that?
And what also stands out to me is how does this:
here’s the thing, on the surface with the info you have here that sounds true, but what about the fact that outside of these two parts (My A and his thing with my sister) of our 23 years together, he has been a very good husband, father, provider, family member, etc?
Match up with this:
Also, I had bought him a dashcam for christmas last year because both my kids have them and they have proven invaluable to have proof of reckless driving etc in case of an accident. So being that my husband is an on the road salesman, I thought it was a great idea. He never installed it. Both times I asked him, before I knew any of this, why he didnt and he blamed it on not knowing how. But I call bullshit because he does LOTs of wiring of electrical, music equipment, etc. WOuld you be paranoid about that?
If these incidents were isolated, do you really think you'd find yourself in yet another sketchy situation in which he's lying to you? Does this SOUND like the actions of a trustworthy man who deserves the benefit of the doubt when he says there isn't anything more for you to find?
I'm worried for you. Not just about the pedophile stuff but because there seems to be more recent questions of fidelity too. Please know that you are WELL within your rights to ask him to take a polygraph test and pass before he is allowed back home. In fact, I'd say you don't have the luxury of NOT asking for him to do this one basic thing for you because the stakes are so high. If he passes, only then maybe I can get behind the adult children not being told as it would put some credence behind it being a one off even though I still think you have a lot to lose even if it was.