EXETER — The Exeter man accused of criminal defamation for online comments he made against Exeter Police Chief William Shupe is seeking $65,000 to settle his claims after the charge was dropped, according to a demand letter sent to the town.

Robert Frese has threatened to bring a federal lawsuit against the town, Shupe, and Detective Patrick Mulholland for allegedly violating his free speech rights if the case isn’t settled.

The 63-year-old Frese was arrested on a criminal defamation charge on May 23 after posting a comment on The Exeter News-Letter’s Facebook page accusing Shupe of covering up for a “dirty cop.”

In the demand letter, the American Civil Liberties Union of New Hampshire argues that police had no probable cause to arrest Frese under the criminal defamation law, which states, “A person is guilty of a class B misdemeanor if he purposely communicates to any person, orally or in writing, any information which he knows to be false and knows will tend to expose any other living person to public hatred, contempt or ridicule.”

According to the letter, Mulholland wrote in a police report that there was no credible information to suggest that the chief covered up any criminal acts by an officer and that he believed Frese had “crossed the line from free speech to a violation of the law.”

The charge led to criticism of the police department from the ACLU and others who claimed it violated Frese’s First Amendment rights. Police dropped the charge on June 7 following a review by the Attorney General’s office.

The demand letter quoted a memorandum from the Attorney General’s office dated June 4 that said, in part, “The fact that members of the Exeter Police Department think that Frese’s statements are false does not somehow criminalize Frese’s speech.”

The memorandum also stated that even if his statements were “demonstrably false,” case law makes it clear that he couldn’t have engaged in criminal defamation unless he made the statements with “actual malice,” meaning that he knew the statements were false.

“The incident report makes clear that the Exeter Police Department failed to consider this requirement when determining whether to arrest and charge Frese. Instead, the department only considered whether there was credible information to support Frese’s statements — specifically, Detective Mulholland expressly stated in his report that he brought the charge against Frese because there was no credible information that Frese’s statements were true.

“But this is not the legal standard. Without probable cause of actual malice, Frese’s arrest and the subsequent charges against him raised First Amendment concerns,” the memorandum said.

Exeter Town Manager Russ Dean confirmed that the town had received the demand letter and that it was referred to Primex, the town’s insurer. He declined further comment.

Frese now wants $65,000 to cover his alleged damages, which include his arrest and time spent in police custody and being investigated; the personal effort spent preparing his criminal defense between May 23 and June 7; and enduring a criminal prosecution until the charge was dismissed on June 7.

If his claims aren’t settled, the letter said Frese will file a federal lawsuit against the town and Shupe and Mulholland in their individual capacities.

The ACLU claims Frese’s speech didn’t violate the criminal defamation statute; charging and arresting him violated his First Amendment free speech rights; and that the town is liable because the decision to charge and arrest him was made by the police chief.

Gilles Bissonnette, legal director for the American Civil Liberties Union of New Hampshire, said he could not comment on any settlement negotiations.