Have you ever used a crate?

When you take them out are you leash walking them??? The best thing I can suggest is to get rid of the pads, they only encourage the dogs to pp inside. First thing in the morning, leash them up and take them for AT LEAST a good 15 minute walkies.
Close all the doors in the ouse to all the rooms and limit the dogs ability to roam around.
IF YOU CATCH your pups peeing inside, give them a command, like PP OUTSIDE, or whatever you chose. Use this command when you are taking your dogs outside for walkies as well - when they are going pp give them a commmand, soon enough they should relate the words with the act.

I am no expert, but I have dealt with this before. This is my very humble opinion:)

I think you are having an issue of jealousy. Did this start after the puppy became the center of attention?

I know it sounds crazy, but I have had two friends and myself deal with this years ago. They are trying to get your, and your daughter's attention. It may not even be the younger dog that is initiating the jealousy. Do you leave them during the day? Are they alone maybe?

One of my friends had a dog that started doing this and other horrible acts when he married. This dog had been his owners (alone) for many years, with no evil wife around:)

The dog would tear up anything that was left down that smelled like the new wife. Kinda funny if you think about it, but not if you are experiencing it. This dog died of old age, but was never trained to stop the behavior. It was actually very sad.