Reuters reports that according to Nocella, Steele came to his office in early February and admitted that he had been violating protocol.
Chief Investigating Officer Colonel Elizabeth Fleming also heard testimony about what investigators found when they searched Steele's living quarters.
Special Agent Thomas Barnes, the U.S. military's senior fraud investigator for Iraq and Afghanistan, said he was shocked by the amount of classified material they discovered--up to 65 documents and piles of CD-ROMs.
"I'd never seen that amount of classified material not properly stored, not properly labeled and not properly protected," Barnes told investigators by telephone from the United States.
"In my opinion the documents that were found were extremely sensitive to the army's mission in Iraq. I believe if those documents were compromised it could have been devastating."
Yesterday's testimony saw Lieutenant-Colonel Quinten Crank, whose unit took over from Steele's on Oct. 5., testifying that Steele arrived during a family visitation day after phoning to say he had "college material" for a detainee's daughter.
He said he saw Steele having a conversation with the daughter of "a high-value detainee".
"He gave her a box containing some computer programmes and computer sheets," Crank told the investigation.
Steele, commander of the 451st Military Police Detachment, faces a range of charges that include fraternizing with a prisoner's daughter, illegally storing and marking classified material, maintaining an inappropriate relationship with an interpreter, possessing pornographic videos, failure to obey an order, dereliction of duty regarding government funds, and providing an unmonitored cell phone to detainees--the act that earned him the charge of treason.
Fleming, who is conducting the case against Steele, could conclude by recommending that no action be taken, that some or all of the charges be dismissed or that a court-martial be held, among others.
Her report will be forwarded to Steele's commanding officer, Col. Michael Galloucis, commander of the 89th Military Police Brigade, who will then forward his own recommendations to the No. 2 American commander in Iraq, Lt. Gen. Raymond Odierno for a final decision.