The standoff in Bunkerville, NV, came to a head this past weekend, and the BLM backed down, returning Bundy's cattle to his ranch following a roundup.
At issue is Bundy having not paid grazing fees for public lands for 20 years. The BLM claims Bundy owes a million dollars.
"Cliven Bundy does not recognize the United States. He says that the United States is a foreign government. He doesn't pay his taxes, he doesn't pay his fees, unlike the rest of the ranchers. He doesn't follow the law," Reid said on Thursday.
On Thursday afternoon, FOX5 spoke with Bundy's sister, Margaret Houston, about Reid's remarks.
"You know, Harry Reid doesn't even know my brother. He doesn't even know my family. He doesn't know what we do. We pay our taxes. Cliven has always paid his taxes," she said.
Reid referenced the self-described militia members that came to Bunkerville over the weekend to support Bundy.
"It's an issue that we cannot let go, just walk away from. Keep in mind what happened up there. There were hundreds, hundreds of people from around the county that came there. They had sniper rifles on the freeway, they had assault weapons, they had automatic weapons," Reid said.
"I mean, they were the ones, SWAT pointing guns at us. We were there pushing our point, wanting our cattle back, and they were there with their guns, their snipers, their SWAT," Houston said.
Reid suggested those protesters purposely put women and children in front of armed BLM rangers.
"As one of the former sheriffs from Arizona said, they had children and women lined up, because if anybody got hurt, [protesters] wanted to make sure they got hurt first, because [protesters] want the federal government hurting women and children," Reid said.
"These people who hold themselves out to be patriots are nothing more than domestic terrorists, and I think that we are in a country [where] people should follow the law. ... What went on up there is domestic terrorism," Reid continued.
"We are not terrorists. We are United States citizens. We love our country. We had [family members] fight and die in the wars. We are anything but terrorists," Houston said.
The BLM has vowed to pursue the matter in court. According to The Associated Press, Reid said a federal task force is being formed to resolve the dispute.
Copyright 2014 KVVU (KVVU Broadcasting Corporation). All rights reserved. The Associated Press contributed to this report.