Sword is likely Garp's project or Aokiji, neither of them believe Luffy to be evil that needs to be monitored and overthrown.
Luffy isn't going to enslave a country in secret, he doesn't do anything in secret.
Anyway: Infiltration would fail because Luffy is very selective of his crew, his crew is small and tightnit, someone would notice, and he would turn them to his side due to his charisma.