Answer:
Folke Cronholm was secretly working for the Germans.
Step-by-step explanation:
Paul B. Janeczko's "The Dark Game: True Spy Stories" consists of numerous stories of true spy events in the history of America. The book contains top-secret details of some events of the world that were uncovered.
In the given passage from the book, the event involved is the desire to get ahold of a particular telegram that was sent to the German ambassador in Mexico. And by referring to the past event of how Mr. H. had 'uncovered' the suspicious activities of Folke Cronholm to the US government, we can safely assume that Mr. Cronholm was secretly working for the German government. This is evident from the sentence "Sharp-eyed Mr. H. had noticed that Cronholm was making frequent visits to the telegraph office, far more visits than one would expect from a representative of the Swedish government, given the limited relationship between that government and Mexico."
Thus, the correct answer is the third option.